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By The Associated Press

First Republic Bank has become the second large regional bank with assets over $200 billion to fail in just a few weeks. Like Silicon Valley Bank, which was seized by the government on March 10, First Republic catered to a wealthy clientele, which helped it grow deposits rapidly but may have also contributed to its undoing. The bank’s business model left it susceptible to a sudden rise in interest rates.

Since the collapse of Silicon Valley Bank — and Signature Bank the same weekend — investors have wondered who’s next. First Republic quickly rose to the top of that list, but investors and analysts worried about banks such as Comerica and KeyCorp, which also had large numbers of accounts with deposits above the federally-insured level of $250,000.

Here are some things to know about the collapse of First Republic Bank.

WHY DID FIRST REPUBLIC FAIL?

First Republic grew rapidly through deposits from wealthy individuals and companies. It used those deposits to make large loans, including jumbo mortgages, when interest rates were at historically low levels in hopes of then convincing customers to expand into more profitable products like wealth management. read more

By SHARON L. LYNCH (Associated Press)

NEW YORK (AP) — U.S. businesses might be able to secure bank deposit insurance for accounts holding more than $250,000 if Congress agrees with the Federal Deposit Insurance Corp.’s new proposal to ease the industry turmoil that has sparked three bank failures in the past two months.

The FDIC recommended the change Monday, rethinking the decades-old limit and seeking more flexibility to cover higher deposits on a “targeted” basis. Raising the insurance limit for business accounts that pay for company operations such as payroll would shore up accounts that pose the most risk to financial stability, the FDIC said.

The proposed change appears to openly acknowledge that the FDIC is looking for ways to calm both depositors and markets as the agency contends with the third bank run this year. First Republic Bank became the second largest failure in history Monday when regulators seized it and JP Morgan Chase stepped up as a buyer.

“The recent failures of Silicon Valley Bank and Signature Bank, and the decision to approve Systemic Risk Exceptions to protect the uninsured depositors at those institutions, raised fundamental questions about the role of deposit insurance in the United States banking system,” FDIC Chairman Martin J. Gruenberg said in a statement accompanying the regulator’s recommendations. read more

WASHINGTON (AP) — Treasury secretary: US could default on debt as early as June 1 if Congress doesn’t raise borrowing limit.