JPMorgan-First Republic Will Haunt US Banks: Mohamed A. El-Erian

Lots will be written on the rise and fall of First Republic Bank. Its customer service was legendary in the banking system, as was its list of rich clients with ample deposits and a healthy appetite for issuing jumbo mortgages to highly creditworthy borrowers. Yet it went from being admired to being seized by regulators and sold to another bank.

What emerged on Monday morning was far from perfect, despite weeks of discussions and posturing. What we have are US government institutions caught up in the policy implications of a “second best” world — that is, the repeated inability to come up with ...