Analysts Warn of More Bank Failures, Possible Recession and Global Repercussions Caused by First Republic Bank Collapse
of First Republic Bank, the second-biggest bank failure in the history of the U.S., has set off the alarm bells of analysts regarding the possible repercussions that this might have on the economy of the country. While President Joe Biden hasthat the banking system is safe, some believe the fourth bank failure in a year might show that the U.S. banking system has systemic weaknesses.
Tomasz Piskorski, a professor at Columbia Business School, believes that other banks could be at risk. HeBy our calculations close to 200 other banks can fail, many of which are smaller [than First Republic]. The issues aren’t over.Several analysts believe that these bank failures have to do with the hawkish policies of the U.S. Federal Reserve, which has been consistently raising interest rates to bring inflation rates down to 2% since last year.