(LifeSiteNews) — The global banking crisis reared its ugly head again today as the Federal Deposit Insurance Corporation (FDIC) took over failed First Republic Bank and sold off its assets and deposits to JPMorgan Chase, America’s biggest bank and the largest in the world by market cap.
First Republic’s downfall marks the second worst bank collapse in U.S. history, also making it the biggest lender to fail since 2008 and the third large-scale bank to founder in just two months, NBC reported.
The FDIC announced the takeover and sale in a Monday morning statement.
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://t.co/8KCKgJ2ZWR. pic.twitter.com/FRrIZk5aBY
— FDIC (@FDICgov) May 1, 2023
“First Republic Bank, San Francisco, California, was closed today by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as receiver,” the FDIC said. “To protect depositors, the FDIC is entering into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all of the deposits and substantially all of the assets of First Republic Bank.”
The FDIC noted that First Republic “had approximately $229.1 billion in total assets and $103.9 billion in total deposits,” nearly all of which will be acquired by Chase.
According to the statement, depositors can continue banking with their existing branch until JPMorgan Chase “has completed systems changes to allow other JPMorgan Chase Bank, National Association, branches to process their accounts as well.”
“Our government invited us and others to step up, and we did,” JPMorgan Chase CEO Jamie Dimon said in a statement. “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. This acquisition modestly benefits our company overall, it is accretive to shareholders, it helps further advance our wealth strategy, and it is complementary to our existing franchise.”
In comments to reporters, Dimon tried to allay fears of further banking woes, characterizing the American banking system as “extraordinarily sound.”
“Obviously, if going forward, you have recessions and rates going up and stuff like that, you’ll see some other cracks in the system, but that has to be expected,” he said. “The system is very, very sound.”
The latest casualty in the banking crisis, the failure of First Republic came after the March collapse of Silicon Valley Bank and Signature Bank spooked depositors, leading First Republic to suffer a first-quarter loss of almost 40 percent of its overall deposits. In the past month alone, the San Francisco-based bank saw its stock plummet by more than 75 percent.
The Daily Wire reported that First Republic “saw customers withdraw their funds in recent weeks as the recent implosions of Silicon Valley Bank and Signature Bank rattled account holders, prompting FDIC officials to secure insured and uninsured deposits at the two failed companies to decrease the risk of bank runs at other institutions.”
The Monday news comes after the Biden White House has sought to tamp down worries about the ongoing banking crisis, claiming after the first major bank tumbled that Americans had nothing to worry about.
“Americans can rest assured that our banking system is safe. Your deposits are safe,” Biden said after the failure of Silicon Valley Bank in March. “Let me also assure you we will not stop at this. We will do whatever is needed on top of all this.”
However, tech mogul Elon Musk last month warned there was “serious danger with the global banking system” in an interview with now-former Fox News host Tucker Carlson, LifeSiteNews previously reported.
In the April interview, which also touched on topics related to artificial intelligence and the dangers of plummeting birth rates, Musk said that rampant inflation was at least partially caused by the government pumping money into the economy during the COVID lockdowns. He said the problem is likely to get worse this year unless curbed by a reduction in the interest rates by the Federal Reserve.
“It’s not that the canary in the coal mine has died, but the miners are starting to die too,” he told Carlson. “Silicon Valley Bank collapsing overnight is one hell of a big canary. It’s more like a turkey. It’s not like some small fry thing.”