After bank failures, raising deposit insurance has benefits – and risks

Sue Hackney had heard the news, of course. When reports surfaced in March that First Republic Bank might be in trouble, the Boston-area marketing professional and her husband debated whether to pull their money out. But “their customer service is so good,” she says, so the couple waited.

Then last week, the San Francisco-based bank released its quarterly earnings, which showed it had lost more than a third of its deposits. Its shares, already deeply discounted, plunged again – in all, a stunning 97% fall in value in three months.

Busy at work and two days away from a trip out West, Ms. Hackney felt in no position to suddenly find