In the United States, the third major bank went bankrupt – First Republic Bank (FRB). On May 1, it came under the control of the Federal Deposit Insurance Corporation (FDIC), which agreed to sell it to one of the largest national conglomerates, JPMorgan Chase. On this subject writing The Wall Street Journal.
JPMorgan Chase will receive all of First Republic Bank’s assets of approximately $229.1 billion and deposits of $103.9 billion. The bank was unable to compensate for damage caused by mass customer withdrawals and falling prices of its own assets. As part of the transfer agreement, the FCIC will cover a portion of FRB’s losses, the WSJ said.
“As part of the agreement, 84 branches of First Republic Bank will open in eight states as branches of JPMorgan Chase Bank. All First Republic Bank depositors will become JPMorgan Chase Bank depositors and have full access to all of their deposits,” the Federal Deposit Insurance Corporation (FDIC) said in a statement.
Previously, government officials were reluctant to allow a FRB takeover that made JPMorgan Chase an even bigger player. writing Bloomberg. Under normal conditions, the agency points out, US regulators would not allow JPMorgan Chase to further increase its deposit base.
In March 2023, FRB was already on the verge of bankruptcy. At the time, the bank was saved with a $30 billion injection from several of the biggest financial institutions, including JPMorgan, which was a major player in the fight for First Republic Bank.
First Republic Bank has become the second largest US bank to fail in history. Washington Mutual Inc., which collapsed in 2008, remains the largest on this metric, with $307 billion in assets and $188 billion in deposits. The bank’s assets and its loan portfolio have also gone to JPMorgan for $1.9 billion.
Since early March 2023, two other largest financial institutions have failed in the United States – California-based Silicon Valley Bank (SVB) and New York-based Signature Bank. SVB’s assets at the time of bankruptcy were $167 billion; its loans and deposits totaling $128 billion were transferred to the bank holding company First Citizens Bank & Trust Company. Signature Bank assets for $38.4 billion were purchased by New York Community Bank, an additional $60 billion remained at the disposal of the FDIC.
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