On Thursday, Fox Business reporter Charlie Gasparino alleged that numerous sources have warned him that over a dozen regional banks are “very impaired” in the wake of First Republic Bank’s collapse.
“The big banks, I believe, the J.P. Morgans, the Bank of America, CitiGroup, Wells Fargo, they’re well-capitalized, they’re diversified and do different things, but we have a problem with regional banks,” Gasparino reportedly stated during an appearance on “Fox News Tonight” with host Lawrence Jones. “And what is the problem? The problem is we printed a ton of money, we spent a ton of money from the federal government. Those banks went out on the spectrum, as gamblers always do, when you give them free money, and they invested in risky stuff. They loaded up on capital at the top of the market.”
He continued, “When you put those two things together, you have a real hole in the balance sheet of many of these regional banks. Now if you’re at a regional bank, should you be worried? I would say yes, you should be worried.”
First Republic Bank was shut down early Monday morning after federal regulators seized control of it, selling its rights to JPMorgan Chase. According to the Daily Caller, this amounted to the second-largest bank failure in U.S. history.
The Federal Reserve identifies First Republic as previously being the 14th biggest commercial bank in the nation.
In a separate Fox News appearance with show host Martha MacCallum, Gasparino used less-than-formal language to describe the gravity of the situation, declaring that “We’re in deep Doo Doo” and joking that it is an “economic term” for something he cannot repeat on television.
When Charlie Gasparino has to use slang term to describe the banking situation!
"We're in deep Doo Doo" 😆😆😂🤪….You know it's bad! 😳 pic.twitter.com/fcGuG9RaZj
— Gioathens (@Gioathens1) May 5, 2023
In Gasparino’s eyes, the failings of Signature, Silicon Valley, and First Republic were not fluke occurrences and more banks will undoubtedly follow.
“You have three banks. Each one of these banks that failed were considered one-off,” the Fox News reporter explained. “There’s no such thing as one-offs. There’s no such thing as three-offs. The same sort of stuff, risk-taking that those three banks took – Signature, Silicon Valley, and First Republic – is duplicated throughout the banking system, particularly in the mid-size banks, the regional banking system.”
Around two dozen banks have comparable balance sheets with money-draining assets, according to Gasparino.