Originally aired on May 6, 2023

This episode of Money Talks discusses the recent failure of First Republic and provides an overview of how banks work and what it means for a bank to fail.

• There are approximately 4,100 commercial banks in the US with FDIC insurance.
• US banks have about $21 trillion in liability and $23 trillion in assets, with consumer deposits considered liabilities.
• Bank failures rely on the trust of depositors, and erosion of trust with customers can lead to insolvency.
• Banks have various types of loans and securities as assets, including Treasury and agency securities which have been the cause of recent bank failures.
• The failure of a bank can have significant economic consequences and highlights the importance of financial stability and regulation.