According to the Federal Deposit Insurance Corporation (FDIC), First Republic Bank has become the third major US bank to fail in recent months. In response, JPMorgan Chase will be taking over “all of the deposits and substantially all of the assets” of the troubled bank.
The FDIC noted that JPMorgan Chase’s acquisition of First Republic Bank’s assets will avoid the need for the agency to use its emergency powers and reduce disruptions for customers.
As of April 13, 2023, First Republic Bank held approximately $229.1 billion in total assets and $103.9 billion in total deposits. After the deal is finalized, all the bank's depositors will become depositors of JPMorgan Chase Bank, National Association and will have full access to their funds.
The collapse of Silicon Valley Bank and Signature Bank in recent months raised concerns of a wider banking crisis that could impact the global economy. However, the FDIC's announcement aims to ease these concerns by stating that JPMorgan Chase’s acquisition of First Republic Bank’s assets will avoid a potential takeover by the agency and minimize disruptions for loan customers.
“We were able to deal with First Republic’s failure without using the FDIC’s emergency powers. It is a grave and unfortunate event when the FDIC uses these emergency powers,” said FDIC Board of Directors member, Jonathan McKernan. “Any decision to use the FDIC’s emergency powers should be approached skeptically, taking into account the unique facts and circumstances of the time, and with careful attention to the implications for the future.”
