First Republic Bank FRC became the second-biggest bank failure in U.S. history after the lender was seized by the Federal Deposit Insurance Corp. and sold to JPMorgan Chase JPM on May 1. First Republic is the latest victim of the panic that has roiled small- and midsize banks since the failure of Silicon Valley Bank last March.
The collapse of SVB and now First Republic underscores how the impact of risky decisions at one bank can quickly spread into the broader financial system. It should also provide the impetus for policymakers...