The FDIC and California regulators say JPMorgan Chase plans to acquire most of First Republic Bank, which was a tad bigger than SVB and had $100B+ in outflows
now JPMorgan Chase's — uninsured depositors is Sen. Dianne Feinstein who, according to her latest financial disclosure, had between $1,000,001 and $5,000,000 in a First Republic account. Last week, a spokesman told NPR she still has the account. Kate Judge / @profkatejudge : Framing by FDIC is telling here. Would be interesting to see the other bids and really interesting to know if any of them proposed assuming less than all of the deposits. FDIC had formal obligation to minimize cost but also had reasons to want all depositors to be made whole. https://twitter.com/... Kate Judge / @profkatejudge : FDIC just approved a $13B hit via a transaction that allows the largest bank in the country to grow substantially larger. It's not a great time to gloat. https://twitter.com/... Adam Tooze / @adam_tooze : The forced sale of San Francisco-based First Republic to JP Morgan is the second-largest bank failure in US history, after Washington Mutual in 2008 — marginally bigger than Silicon Valley Bank. Also confirms JPM's preeminence in global financial system. https://www.ft.com/... https://twitter.com/... Joe Weisenthal / @thestalwart : “JPMorgan will “assume all deposits, including all uninsured deposits, and substantially all assets” of First Republic, the California Department of Financial Protection and Innovation said in a statement...” https://www.bloomberg.com/... @litcapital : Jamie Dimon on the analyst call explaining the First Republic acquisition https://twitter.com/... Jack Farley / @jackfarley96 : Key difference b/w Bear & First Republic: $FRC was a real depository institution with deposits. Bear funded itself primarily in wholesale market (repo, asset-backed commercial paper, and other capital market instruments) FDIC release: https://www.fdic.gov/... 3/4 https://twitter.com/... @ivanthek : It's not lost on me that the FDIC waited until after midnight to make this Mayday proclamation. https://www.fdic.gov/... https://twitter.com/... Jan Nieuwenhuijs / @jangold_ : “As the nation's largest bank, JPMorgan would ordinarily be barred from acquiring another lender because it controls more than 10 per cent of American deposits. But regulators can waive the cap if necessary.” What a clown show https://www.ft.com/...
Financial Times
Context & Ripple Effects
First Republic’s resolution follows the March failure of Silicon Valley Bank, whose collapse was tied in related coverage to interest-rate exposure and a concentrated depositor base. First Republic had already suffered a sharp market repricing despite reporting substantial unused liquidity, underscoring that liquidity disclosures alone did not restore confidence after SVB’s depositor-driven collapse.
The FDIC had also moved Signature Bank’s branches, loans and deposits to Flagstar, establishing a pattern of using bank-sale processes to contain failed institutions. This deal is more consequential because it places most of First Republic with JPMorgan, while the FDIC records a $13 billion loss tied to the transaction.
First-order effects
JPMorgan takes over most of First Republic, transferring its customers and operating footprint to the largest U.S. bank rather than leaving the failed lender in prolonged receivership.
The FDIC absorbs a stated $13 billion loss on the resolution, making the public cost of stabilizing the failed bank explicit.
Second-order effects
Other regional-bank customers may view size and perceived backing as more valuable after successive resolutions, increasing pressure on smaller lenders to retain deposits and demonstrate durable funding.
The transaction reinforces the FDIC’s sale-and-transfer playbook seen in the Signature Bank transfer to Flagstar, while the deposit-cap waiver highlights how crisis resolution can override normal concentration constraints.
Third-order effects
If repeated, crisis-era sales to the largest banks could accelerate concentration in U.S. banking, even as policymakers weigh the stability benefits against reduced competitive choice.
The sequence from SVB’s FDIC receivership to First Republic’s sale points to deposit confidence—not just asset quality—as a central fault line in a faster-moving banking system.
The trend: This is one data point in a post-bank-run consolidation cycle in which regulators use rapid transfers to larger buyers to preserve depositor confidence.
To protect depositors, we entered into an agreement with JP Morgan Chase Bank to purchase and assume all deposits and assets of First Republic Bank. Read more ➡️ https://www.fdic.gov/.... https://twitter.com/...
JP Morgan was able to acquire First Republic Bank, despite the rule against one bank controlling more than 10% of US deposits JP Morgan now holds more than $2.4 TRILLION in deposits https://twitter.com/...
The FDIC estimates its loss on First Republic will be $13bn. That takes total losses to $35.5bn - a quarter of the Deposit Insurance Fund. It leaves the insurance fund at 0.92% of insured deposits (vs stat min of 1.35%). Big levy on the big banks to build that back up.
It's wild how America's wealthy elites have near totally caused the failure of two banks specially aimed at their needs basically because they pulled all their own money for no real reason other than an old-fashioned contagion. https://twitter.com/...
(1) ~$40bn of uninsured deposits are being honored, yet the DIF is taking a $13bn hit. Since no systemic risk exception was invoked, shouldn't that loss have fallen on uninsured depositors instead of the DIF? Was this deal really “least cost” to the DIF, as required by law?
JPMorgan Chase CEO Jamie Dimon: “Our government invited us and others to step up, and we did. Our financial strength, capabilities and business model allowed us to develop a bid to execute the transaction in a way to minimize costs to the Deposit Insurance Fund.” https://twitter.…
One of First Republic Bank's — now JPMorgan Chase's — uninsured depositors is Sen. Dianne Feinstein who, according to her latest financial disclosure, had between $1,000,001 and $5,000,000 in a First Republic account. Last week, a spokesman told NPR she still has the account.
Framing by FDIC is telling here. Would be interesting to see the other bids and really interesting to know if any of them proposed assuming less than all of the deposits. FDIC had formal obligation to minimize cost but also had reasons to want all depositors to be made whole. htt…
FDIC just approved a $13B hit via a transaction that allows the largest bank in the country to grow substantially larger. It's not a great time to gloat. https://twitter.com/...
The forced sale of San Francisco-based First Republic to JP Morgan is the second-largest bank failure in US history, after Washington Mutual in 2008 — marginally bigger than Silicon Valley Bank. Also confirms JPM's preeminence in global financial system. https://www.ft.com/... ht…
“JPMorgan will “assume all deposits, including all uninsured deposits, and substantially all assets” of First Republic, the California Department of Financial Protection and Innovation said in a statement...” https://www.bloomberg.com/...
Key difference b/w Bear & First Republic: $FRC was a real depository institution with deposits. Bear funded itself primarily in wholesale market (repo, asset-backed commercial paper, and other capital market instruments) FDIC release: https://www.fdic.gov/... 3/4 https://twitter.…
“As the nation's largest bank, JPMorgan would ordinarily be barred from acquiring another lender because it controls more than 10 per cent of American deposits. But regulators can waive the cap if necessary.” What a clown show https://www.ft.com/...