TOO BIG TO FAIL?Īnalysts and industry executives said the deal - struck over the weekend after the FDIC ran an auction process that saw several other banks bid - should calm markets. White House press secretary Karine Jean-Pierre said the actions would also ensure that First Republic, which she said was 'severely mismanaged,' would be held accountable. The White House praised 'decisive' actions taken by regulators to protect depositors and keep the banking system stable. 'Critically, taxpayers are not the ones that are on hook.'

'These actions are going to make sure that the banking system is safe and sound,' Biden told an event at the White House. He repeated his call for stronger bank regulation and supervision. President Joe Biden on Monday hailed the deal for protecting depositors without making taxpayers foot the bill. The deal will cost FDIC's Deposit Insurance Fund about $13 billion, according to the regulator's initial estimate. 'Our government invited us and others to step up, and we did,' said Jamie Dimon, JPMorgan Chairman and CEO, who had been a key player in the 2008 financial crisis as well and bought Bear Stearns in a weekend rescue. Federal Deposit Insurance Corp (FDIC) as part of the deal to take control of most of the San Francisco-based bank's assets and get access to First Republic's coveted wealthy client base. JPMorgan will pay $10.6 billion to the U.S. The bank's shares tumbled 43.3% in premarket trading on Monday before they were halted. First Republic shareholders will be wiped out in the transaction, Wedbush analysts said. Shares of JPMorgan rose 2% on Monday, while those of mid-tier banks fell and the KBW Regional Banking Index (.KRX) closed down 2.7%. bank failure in two months and the largest since Washington Mutual in 2008. The bank had limped along since then, but investors fled again last week when it disclosed more than $100 billion in outflows in the first quarter and a plan to explore new options.īarely a week later, California regulators on Monday seized First Republic and put it into FDIC receivership alongside the sale of its assets, marking the third major U.S. lenders most battered by a crisis in confidence in the banking sector in March, when depositors fled en masse from smaller banks to giants like JPMorgan as they panicked over the collapse of two other mid-sized U.S. bank failure since the 2008 financial crisis and draw a line under a lingering banking turmoil.įirst Republic was among regional U.S. May 1 (Reuters) - Regulators seized First Republic Bank (FRC.N) and sold its assets to JPMorgan Chase & Co (JPM.N) on Monday, in a deal to resolve the largest U.S.

The Rising by Morgan Brice