Since March, a total of three local banks have closed their doors, the most recent one being First Republic Bank in San Francisco.
It ranks second in terms of the size of a bank failure in American history, trailing only Washington Mutual, which failed in the midst of the financial crisis in 2008.
First Republic Bank Seized By Federal Regulators
In an effort to safeguard its depositors and avert another banking crisis, federal regulators seized the First Republic and struck a purchase deal to sell the majority of its businesses to JP Morgan Chase.
Customers do not need to alter their banking relationships in order to maintain their deposit insurance coverage up to applicable limitations, the regulators stated in a release.
The Federal Deposit Insurance Corporation will continue to protect the bank’s accounts.
One of the banks that was no longer subject to strict regulation as a result of a Trump-era statute that increased the asset threshold for higher regulatory standards from $50 billion to $250 billion was First Republic Bank, which has around $229.1 billion in total assets.
The new law exempted 25 of the country’s 38 biggest banks from more stringent capital and liquidity requirements, improved risk management guidelines, living will requirements, and some stress testing requirements, according to the Center for American Progress, a public policy research and advocacy organization.
Read more: Federal Reserve Data Reveals Decrease In Us Bank Deposits And Loans For Latest Week
Crucial Opportunity for US Banks
In other words, First Republic Bank’s failure is an indication of the decay at the core of capitalism’s economics and politics, and the reaction to it is a direct reflection of the open class conflict the capitalist class is currently engaged in.
Most importantly, it provides a crucial opportunity to demonstrate that these issues in the banking sector are features, not bugs, of capitalism, and that the only way for workers to actually improve their lives is by dismantling the entire boom-bust-bailout system that so miserably fails to provide a decent living for tens of millions of Americans.
Read more: Inflation: Bank Of America CEO Warns Of Looming Economic Downturn
