JP Morgan Asset Management executives unconvinced about U.S. regional bank The Federal Deposit Insurance Corporation (FDIC) and Federal Home Loan Banks (FHLB) emergency credit programs end, warning that a collapse of the First Republic could be a possibility. and can cause a domino effect
ininterviewOn Bloomberg television April 27, Bob Michele, chief investment officer at JP Morgan Asset Management, said the impact of First Republic’s liquidity woes caused by massive deposit outflows was not “limited to” banks. only But it could affect the entire banking industry.
Michele stressed that this was not a bank-specific incident. When asked if he viewed this as “State problems or specific banking problems?”
He also added that The liquidity problem facing First Republic “shouldn’t have happened” since banking was “The most highly regulated industry in the world”
Michele believes it is necessary. “Continuous progress on solutions” is needed to keep the effects of the collapse under control and prevent it from spreading across the wider financial system.
In the final quarter of 2022, it was reported that both Signature Bank and Silvergate Bank received substantial loans from FHLB, a group of 11 regional banks across the United States that fund banks and other lenders. Nearly $10 billion and $3.6 billion in total, respectively.
However, despite receiving financial assistance But in the end, both banks collapsed due to the massive outflow of deposits.
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