2024-04-28 18:31:46
New Delhi: Another bank has collapsed in America. The country’s regulators have taken over the reins of Republic First Bank and sold it to Fulton Bank. The Federal Deposit Insurance Corporation (FDIC) gave this information on Friday. Last year, five banks in America went bankrupt due to the regional banking crisis. Since then many regional banks are under pressure. Its first victim became Republic First Bank of Philadelphia. The FDIC has agreed to sell this bank to Fulton Bank, a unit of Fulton Financial Corporation. Fulton Bank would take all its deposits and buy all the assets. According to the data till January 31, the total assets of Republic Bank were six billion dollars and deposits were four billion dollars. 32 branches of the bank in New Jersey, Pennsylvania and New York will open as branches of Fulton Bank. Last year, three banks in America went bankrupt. Silicon Valley and Signature Bank went bust in March and First Republic in May. The FDIC said Republican First Bank was shut down by Pennsylvania state regulators. This is the first bank in America to collapse this year. The Pennsylvania Department of Banking and Securities appointed the FDIC as receiver after closing this bank. However, compared to last year’s regional banking crisis, the Republic Bank crisis is much smaller. People who have money deposited in Republic Bank will become customers of Fulton Bank. The FDIC’s deposit insurance cover is $250,000 per depositor.
Banking Crisis: Another bank is going to sink! Share price remains garbage, 70% decline in one month
What is the reason for the crisis?
The FDIC says that for the first time since November last year, a bank in America has collapsed. Then the Citizens Bank of Sac City, Iowa State was bankrupt. Republic First Bank is separate from First Republic Bank, which collapsed last year. This San Francisco bank collapsed in May and its assets were sold to JP Morgan Chase. Republic First Bank has collapsed at a time when regional banks are going through bad times. The credit based industry has been badly affected due to high interest rates. The banking crisis started last year after the collapse of Silicon Valley Bank. A few days later, Signator Bank and then First Republic Bank went bankrupt. Overall, five banks in America collapsed last year.
Recently, there was a lot of turmoil in the shares of New York Community Bank. The bank had said that it had found many flaws in the control of the company. After this, customers started withdrawing money from the bank in a hurry. Finally, in March, the bank got a lifeline of equity investment of one billion dollars from investors. The bank’s investors include former Treasury Secretary Steven Mnuchin’s company Liberty Strategic Capital. Experts say that for almost a decade, central banks have made people addicted to easy money and huge liquidity. Now they are tightening the policy which has created a crisis in the financial system. American banks suffered a loss of $620 billion in the year 2022. The condition of banks had deteriorated due to the way the US Federal Reserve had increased interest rates to control inflation.