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Mohamed El-Erian: We've created more moral hazard in the bank system
05:38 - Source: CNN
New York CNN  — 

Heartland Tri-State Bank of Elkhart, Kansas, failed on Friday, with the Federal Deposit Insurance Corporation taking control.

The FDIC agreed to assume all the deposits of Heartland Tri-State Bank to protect customers, entering a purchase and assumption agreement with Dream First Bank of Syracuse, Kansas.

That means the four branches of Heartland Tri-State Bank will reopen as branches of Dream First Bank on Monday.

The recent closures of First Republic, Silicon Valley Bank and Signature Bank this year have shaken up the banking industry, prompting lawmakers to introduce new legislation to protect customer deposits and stabilize the financial system.

Heartland Tri-State Bank is the first bank to fall since First Republic, the nation’s second-largest bank failure ever, in early May.

The FDIC said bank customers can access their money by writing checks or using ATM or debit cards. They also won’t have to change their banking, as they will automatically become customers of Dream First