Bob Michele, CIO of JPMorgan Asset Management, believes that the impact of First Republic Bank’s liquidity issues isn’t just limited to the bank itself, but could potentially affect the entire banking industry. He blames the “high price of everything” as a major factor leading to the recent banking crisis events. Michele believes that a resolution is urgently needed as regional banks are “heavily dependent” on both the FDIC and FHLB. Regional banks are heavily dependent on the FDIC and FHLB for financial assistance, but both collapsed due to outflows. Ryan Selkis suggests that unless the government recognizes the Federal Reserve’s policies, more banks may face collapse in the future. Treasury Department staff members are reportedly studying ways to expand deposit insurance beyond the maximum cap of $250,000 to cover all deposits.
