Could First Republic Bank Collapse Trigger a Recession?

By now we’ve all been reminded that US bank deposits are federally insured up to $250,000. Amounts above that are well out of reach for most soccer moms and barbecue dads, so they don’t have to fear losing their bank savings.

The bigger issue is whether the banking crisis will continue to spread, and how it might spread into the economy—for example, by making it harder to get loans, spurring even more layoffs, and even tipping the country right into recession.

Most experts believe that we are still far from serious consequences, although there may be more short-term pain ahead.

“For the vast majority of people, this mini-crisis is going to pass, and we’re all going to have a lot of other things to worry about in our professional and personal lives,” said Ross Levine, finance professor at the Haas School of Business at UC Berkeley . Still, he said, “This is a very uncertain time.”

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