Type to search

Money News Politics

First Republic Becomes Next Major American Bank to Fail Under Biden

Share

JP Morgan Chase is set to take over the failed First Republic bank after it collapsed in the third major bank failure in the past two months in America. In a statement, the United States national banking regulator, the Federal Deposit Insurance Corporation (FDIC), announced on Monday morning that the San Francisco-based bank had indeed failed after First Republic customers withdrew around $100 billion of deposits over the past few days as its stock price collapsed.

In a deal orchestrated by the government, JP Morgan will “assume all of the deposits and substantially all of the assets of First Republic Bank,” including the 84 offices previously operated by First Republic across eight states, which will open as branches of JP Morgan Chase on Monday.

According to the FDIC, First Republic Bank had an estimated $229.1 billion in total assets as of April 13th as well as $103.9 billion in total deposits, meaning that it was the second largest bank failure in American history.

The banking regulator said that all deposits will continue to be insured by the FDIC and that customers do not need to make any changes to retain their deposit insurance.

The collapse of the First Republic Bank is predicted to cost the Deposit Insurance Fund about $13 billion, as it struck a loss-sharing deal with JP Morgan Chase.

The chief executive of JP Morgan Chase Jamie Dimon said on Monday that the government had “invited” the major bank, among others, to “step up, and we did”. Dimon claimed that the takeover would “modestly benefit” JP Morgan Chase and that the assets acquired would be “complementary” to its existing holdings.

The collapse of the San Francisco-based bank will likely become a political issue, with Republicans likely to brand the failure of the bank as another casualty of the poor economy of President Joe Biden, whose disastrous economic and foreign policies resulted in rampant ‘Bidenflation’.

When the Federal Reserve stepped in to raise rates to dampen inflation, the value of large portfolios of bonds at some banks were hit hard, as they were bought up by the banks at times of lower interest rates.

The inflationary spiral and ensuing rate hikes have impacted many banks negatively, with similar issues befalling the now-failed Silicon Valley Bank, which became the largest bank failure since the 2008 global financial crisis in March.

In addition to poor predictions of the market and rate hikes, others previously criticised SVB for its insistence on pursuing leftist Environmental, Social, and Governance (ESG) policies in its operations, which placed emphasis on diversity, inclusion, and equity (DIE) rather than solid business practices.

Follow Kurt Zindulka on Twitter here @KurtZindulka

Download Now
0 Downloads
Breitbart News

News, commentary, and destruction of the political/media establishment.

  • 1