Enquiries: Hlengani Mathebula Head: Communications and Strategy Tel: 0 E-mail:. The South African Reserve Bank has complete confidence in their integrity. “The banking system remains sound and resilient, and Americans should feel confident in the safety of their deposits and the ability of the banking system to fulfil its essential function of providing credit to businesses and families,” a Treasury spokesman said. South Africa’s bank notes are produced to the highest international security standards. Soon after First Republic’s seizure was announced, the US Treasury moved to try to allay concerns. “If another bank proved to be fragile, that would be another problem,” he added. “First Republic was identified as a problem bank as early as mid-March and the announcement of its closure is not a new reason to worry,” Nicolas Veron, an economist at the Peterson Institute for International Economics said ahead of the takeover announcement. That lender too was acquired by JPMorgan, the largest bank in the United States. With its assets standing at $US233 billion ($A351bn) at the end of March, First Republic is the second-largest bank to fall in US history - excluding investment banks, such as Lehman Brothers - after Washington Mutual’s bankruptcy during the financial crisis of 2008. The largest ever US bank collapse was that of Washington Mutual in 2008. Observers are closely watching for any broader implications of the latest financial institution’s collapse. To avert yet another banking collapse, authorities reached a deal with 11 major banks in March to extend a $US30 billion (A$45bn) lifeline to First Republic.īut this was not enough to reassure investors.īy Friday’s close, First Republic was worth only $US654 million ($A986m), down from more than $US20 billion ($A30bn) at the start of the year, and $US40 billion ($A60bn) at its peak in November 2021.Īt first glance, First Republic appeared to be well-positioned: it was known to have a wealthy clientele who deposited large sums.īut the string of banking defaults rattled customers, and a majority of First Republic’s loans were fixed-rate mortgages, which have lost value due to soaring interest rates. Swiss banking giant Credit Suisse became the highest-profile casualty when it was pushed by regulators to merge with its rival, UBS. ![]() ![]() (Photo by SPENCER PLATT / GETTY IMAGES NORTH AMERICA / Getty Images via AFP)
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