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U.S. regulators on Monday seized First Republic, the third major
U.S. institution to fail in two months, with JPMorgan Chase & Co
agreeing to take $173 billion of the bank's loans, $30 billion
of securities and $92 billion of deposits.
"Treasury is encouraged that this institution was resolved with
the least cost to the Deposit Insurance Fund, and in a manner
that protected all depositors," the spokesperson said.
"The banking system remains sound and resilient, and Americans
should feel confident in the safety of their deposits and the
ability of the banking system to fulfill its essential function
of providing credit to businesses and families."
San Francisco-based First Republic came under intense pressure
after disclosing last week that it had suffered more than $100
billion in outflows in the first quarter and was exploring
options.
Treasury had no immediate comment why regulators accepted the
offer from the banking giant JPMorgan, and not those of PNC
Financial Services Group, and Citizens Financial Group Inc,
which also submitted final bids on Sunday, according to sources
familiar with the matter.
The California Department of Financial Protection and Innovation
said it had taken possession of First Republic and the Federal
Deposit Insurance Corporation (FDIC) would act as its receiver.
The FDIC estimated in a statement that the cost to the Deposit
Insurance Fund would be about $13 billion.
In recent years, U.S. regulators have been slow to approve large
bank deals. The Biden administration has also cracked down on
anti-competitive practices.
(Reporting by Andrea Shalal, editing by Ed Osmond and Louise
Heavens)
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