What the First Republic deal means for America’s banks

“Life isn’t knights on horseback,” Logan Roy, boss of Waystar Royco, a media conglomerate, and lead character of “Succession”, a television drama, tells his son Kendall. He is warning his offspring that life is not about heroes. “It’s a number on a piece of paper. It’s a fight for a knife in the mud.”As usual, the old bastard was right. Almost everything in finance can be reduced to a deal between two parties: a number on a piece of paper. Every time someone buys a share they are cutting a deal in which they swap cash for a slice of a company; a loan is a deal in which one party pays cash now in exchange for a stream of the stuff through time. Private-equity investing is the art of a good deal; so is buying property. Sometimes one person gets a good deal, another a bad one—but not all deals are zero-sum. A borrower and lender can both walk away happily from a paid-off mortgage.