JPMorgan Chase & Co won the U.S. Federal Deposit Insurance Corporation (FDIC) auction of the First Republic Bank on Monday. First Republic Bank suffered severe losses after Silicon Valley Bank and Signature Bank collapsed in March 2023, and it was finally seized by FDIC when another wave of investors fled last week. JPMorgan agreed to pay FDIC $10.6 billion in exchange for First Republic’s assets and client list.
President Joe Biden praised the deal for protecting First Republic clients with limited impact on American taxpayers. JPMorgan and other large bank shares rose on the day of the announcement, but mid-tier bank shares declined. Critics of the merger pointed out that it expands the largest bank’s ownership of total bank deposits in the United States from 10% to 13%. Some worry that the collapse of an organization this size would result in unprecedented devastation. JPMorgan CEO Jamie Dimon sees the enormous bank as an asset for the United States economy. First Republic’s 84 offices will immediately reopen as JPMorgan Chase Bank branches.
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