Over the past weekend, the U.S. banking crisis escalated further with the failure of First Republic Bank. The bank, whose assets are being taken over by JPMorgan Chase, represents the second largest bank failure in the history of the United States. While bank customers' deposits are protected, shareholders are left with a devastating loss after their shares were suspended from trading.
As outlined in our March 16, 2023 blog post, our risk-optimized model had excluded First Republic Bank shares from our investment universe early on. Thus, our model has classified and screened out all four crisis banks - Silicon Valley Bank, Signature Bank, Credit Suisse and now First Republic Bank - as high-risk stocks in advance.
Even if we obviously hope that no further banks get into difficulties, we trust in our minimum risk approach to managing our customers' funds and see ourselves as being ideally equipped for the current market environment.
