JP Morgan takes over First Republic after third US bank falls

Jamie Dimon, chief executive of JP Morgan, said the government has asked other companies to «step up» as well. Photo: REUTERS/Marco Bello

The FDIC estimates that the Deposit Insurance Fund will cost about $13 billion [£10 billion], but this remains to be determined.

The collapse is likely to raise concerns again about the state of the US banking system and how the Biden administration is handling the crisis.

First Republic Bank was valued at $27 billion in early February but came under pressure after the collapse of Silicon Valley Bank and Signature Bank in March.

Its shares tumbled last week after it showed that its deposits fell by $100 billion between January and March as wealthy clients and businesses withdrew their money due to concerns about the state of the sector.

This came after the revealing report on the collapse of SVB, in which the regulators are to blame. for failing to properly supervise a lender before it collapsed last month.

An audit by the Federal Reserve found that a combination of poor bank management, lax regulation, and weak government oversight led to the collapse.

p>According to a statement by JP Morgan, 84 First Republic Bank offices in eight states will reopen as branches of JP Morgan Chase Bank as of Monday.

JP Morgan has been actively buying since then In 2021, more than 30 companies were acquired under transactions totaling over $5 billion.