Why Did First Republic Bank Fail So Badly?

The video discusses the recent failure of First Republic Bank (FRC), the third major bank failure in the U.S. this year. FRC was heavily invested in interest-only mortgages and HTM securities, which made it vulnerable to market changes. The collapse of SVB triggered a panic, leading to a massive withdrawal of funds from FRC. Despite having wealthy clients and promising business prospects, FRC lacked a risk management strategy and diversification, ultimately leading to its downfall. The video emphasizes the importance of risk management and diversification for banks to endure market fluctuations.

What financial product did First Republic Bank offer that was popular during the pandemic?

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What percentage of First Republic Bank's loan book was comprised of interest-only mortgages?

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How did First Republic Bank's client base react after the SVB incident?

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What was the main reason for the bank run at First Republic Bank?

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What does the text suggest about the importance of diversification for banks?

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