Jay Ritter
Cordell Eminent Scholar Jay Ritter

First Republic Bank Stabilizes, But More Problems Are Lurking Around the Corner

In a bid to instill confidence in First Republic and the broader sector, a coalition of major financial institutions—including J.P. Morgan, Bank of America and Citigroup—made $30 billion worth of deposits earlier this month. 

Cordell Eminent Scholar Jay Ritter said deposit outflows have slowed, in large part because those most willing to pull their funds have already done so. 

“Secondly, the federal reserve and the FDIC have largely been saying that for any major bank, you don’t have to worry about getting your money back, whether you are an insured depositor or not,” Ritter said. “They’re stating they don’t want the collateral damage for allowing a major bank to go belly up and largely removing the threat which causes bank runs in the first place.”

Read more from Ritter in this story from the San Francisco Standard