On Monday, the stock prices of several mid-size banks experienced a significant drop following the collapse of the third major U.S. bank in two months.
On Monday morning, First Republic Bank closed after an attempt to save the regional bank failed to materialize. Federal regulators promptly seized control of the bank. Later that day, JP Morgan Chase announced its acquisition of First Republic.
After striking a deal to purchase the bank, JP Morgan CEO Jamie Dimon declared, “this part of the crisis is over.”
CNBC has more:
JPMorgan emerged as the winner of a weekend auction for First Republic after regulators decided that time had run out on a private sector solution. The Federal Deposit Insurance Corporation seized the bank and New York-based JPMorgan announced early Monday that it was acquiring nearly all of the deposits and most of the assets of First Republic.
“There are only so many banks that were offsides this way,” Dimon told analysts in a call shortly after the deal was announced.
“There may be another smaller one, but this pretty much resolves them all,” Dimon said. “This part of the crisis is over.”
In the wake of the sudden collapse in March of Silicon Valley Bank and Signature Bank, investors have punished other lenders that had similar characteristics to SVB. Companies with the highest percentage of uninsured deposits and losses on their balance sheet were most scrutinized.
President Biden promised Americans the banking system was secure after the collapse of SVB.
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Bank failures: the domino effect of Brandon’s foolish and irresponsible policies.