Former First Republic CEO Blames Epidemic Cause of Bank Collapse

Former First Republic Bank Chief Executive Michael Loeffler said regulators had not raised any concerns about the bank’s strategy, liquidity or operating results.

First Republic Bank Failure NewsCalifornia banking regulators closed First Republic Bank on May 1 and sold its assets to settle the largest U.S. bank failure since the 2008 financial crisis and put an end to the ongoing banking turmoil. Sold to JPMorgan Chase. (file image)

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Former CEO of First Republic Bank Michael Loefler He said the bank’s failure was caused by spillovers from the failures of other regional banks, and said regulators had not raised any concerns about the bank’s strategy, liquidity or operating performance.

In response to industry-wide panic over the health of local banks, deposits totaling more than $100 billion have been withdrawn from them in the past few weeks, Loeffler said in preliminary testimony before the Senate Banking Committee. Stated. Hearing on Wednesday.

“We couldn’t have predicted that the Silicon Valley banks and our signature banks would fail, or that the failures of these banks would cause a large outflow of our deposits,” he said.

First Republic’s financial position and strategy are reviewed regularly by the California Department of Financial Protection and Innovation (DFPI) and the FDIC, he said.

California banking regulators closed the First Republic Bank on May 1 and sold its assets in a bid to settle the largest U.S. bank failure since the 2008 financial crisis and put an end to the ongoing banking turmoil. Sold to JPMorgan Chase.

Date first published: May 17, 2023, 11:04 IST


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