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According to Reuters, JPMorgan Chase & Co. announced on Monday that it has bought a vast bulk of First Republic Bank's assets and absorbed some liabilities.
Local regulators liquidated the US-based First Republic Bank on Monday to protect depositors. They made an agreement with JP Morgan Chase Bank to buy and assume all deposits and assets of the ailing bank. It is the third significant bank failure in the US since March 2023.
Furthermore, the Federal Deposit Insurance Corporation (FDIC) said in a statement that the Deposits would continue to be FDIC-insured, and customers do not need to change their banking relationship to retain deposit insurance coverage up to applicable limits.
As part of the arrangement, First Republic Bank's 84 offices in 8 states will reopen as JPMorgan Chase Bank and National Association branches, beginning today. All First Republic Bank depositors will become depositors of JPMorgan Chase Bank, National Association and will have full access to their funds.
JP Morgan stated— it will acquire $173 billion in loans and about $30 billion in First Republic Bank securities, including $92 billion in deposits. However, it will not take on the bank's corporate debt or preferred stock.
The failure of a few regional banks in the United States, beginning with SVB and Signature Bank, has resulted in a chain reaction and the closure of many institutions, including First Republic Bank. These episodes have undoubtedly harmed the global banking system and raised concerns about a contagion impact across economies.
—Kritika Singhal
Also Read, The global labour market could lose around 14 million jobs in the next 5 years.
