JPMorgan will take over First Republic Bank, which was seized by the regulator.
JPMorgan is poised to take over the troubled bank, mediated by regulators. The FDIC said in a statement today that the bank went bankrupt.
The US Banking Crisis Continues
First Republic has become the third largest US bank to go bankrupt in recent months. Shares of the San Francisco-based lender fell more than 75 percent last week after customers admitted it had withdrawn $100 billion in deposits in March. JP Morgan, which provides investment banking services, will now take over all of First Republic Bank’s deposits, and substantially all its assets.
The collapse of the First Republic follows the collapse of Silicon Valley Bank (SVB) in March that sparked fears of a wider banking crisis. This was followed by the collapse of another US lender, Signature Bank. A runaway of deposits from lenders forced the Federal Reserve, the US central bank, to take urgent measures to stabilize financial markets.
In March, a group of America’s largest banks stepped forward to give First Republic $30 billion to stabilize the business, but efforts were futile.
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