The US government has transferred First Republic Bank to the country's largest bank, JPMorgan, to save the banking system
The deal means that First Republic's loans will be written off and the deposit insurer will take on part of the troubled bank's losses
The US authorities have transferred a controlling stake in the regional bank First Republic to the country's largest financial conglomerate JPMorgan Chase & Co.
Source. This is reported by CNN.
In this way, regulators hope to put an end to the banking crisis that arose in March after the collapse of Silicon Valley Bank and Signature.
First Republic Bank failed to present an anti-crisis plan: on Monday, its management confirmed that customers withdrew more than $100 billion from deposits in the first quarter.
Immediately afterward, the bank's shares plummeted.
The government, which had been delaying the rescue of First Republic, quickly reached an agreement under which the country's largest commercial financial institution, JPMorgan Chase, will take over all of First Republic's deposits and almost all of its assets.
The branches of the affected bank will be able to resume operations as usual.
It is noted that this is not the first time JPMorgan, led by Jamie Dimon, has rescued troubled institutions. The deal means that First Republic's loans will be written off, and the deposit insurer will take on part of the losses (approximately $13 billion).
The U.S. Department of the Treasury said it was pleased with the solution and that the U.S. banking system remains "healthy and resilient."
"No crystal ball is perfect, but I think the banking system is very stable," Jamie Dimon said during a call with investors on Monday, after his bank, JPMorgan Chase, agreed to buy most of First Republic's assets. – "That part of the crisis is over.
Read more about this in Mind's material "Accents of the Week: The North Sea as a hub for renewable energy in Europe, the consequences of the collapse of First Republic Bank in the United States, and the new terms of trade with China.
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