Fri, April 26, 2024 at 23:58

• 

  Kang-hoon

  • Hello Annie.

  • Today's news is about the first bank failure of 2024.

  • The FDIC has intervened to protect $6 billion in assets and $4 billion in customer deposits at Philadelphia-based Republic Bank.

  • 
• Annie

  • Oh my!😮 That's quite a shock!

  • What happens to the bank's assets and deposits now?

  
• 

  Kang-hoon

  • The assets will be immediately transferred to Fulton Bank, a former rival also based in Philadelphia.

  • Republic Bank's 32 branches in New Jersey, Pennsylvania, and New York will reopen as branches of Fulton Bank.

• Annie

  • So, customers can still access their money, right?

  
• ADward

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• 

  Kang-hoon

  • Yes, that's correct.

  • Customers can access their money by writing checks or using ATM or debit cards.

  • Checks drawn on Republic Bank will continue to be processed and loan customers should continue to make their payments as usual.

• Annie

  • Phew!

  • That's a relief.😌 But isn't this failure a bit unusual?

  
• 

  Kang-hoon

  • Well, it does follow last year's high-profile collapse of Silicon Valley Bank, Signature Bank, and First Republic.

  • These are among the biggest bank failures in American history.

• Annie

  • Wow!😲 That's quite serious.

  • What's causing these failures?

  
• 

  Kang-hoon

  • Concerns about the health of the banking industry have persisted this year, triggered by fears over the industry's exposure to commercial real estate and unrealized losses on US Treasuries.

  • 
• Annie

  • That sounds quite concerning.😟 What's the impact on the FDIC?

  
• 

  Kang-hoon

  • The FDIC expects the failure of Republic Bank to cost about $667 million, which will be deducted from the FDIC's bank-sponsored Deposit Insurance Fund (DIF).

• Annie

  • So, is this news good or bad?

  • What impact will it have on the market?

  
• 

  Kang-hoon

  • In my view, this is bad news.

  • It could lead to a loss of confidence in the banking sector, potentially triggering a sell-off in bank stocks and negatively impacting the broader market.

  • Upon comprehensive consideration, this news is perceived as a 😱Bearish.