A banking crisis resurfaced in the United States with the collapse of First Republic Bank. It is the second largest establishment of its kind in history to fall in the country. For his rescue, the First Republic, in the first instance, intervened with the federal government. Meanwhile, the Federal Deposit Insurance Corporation (FDIC) seized control of First Republic to hand over to JP Morgan. The latter reaffirmed Washington’s intentions to prevent the crisis from worsening at any cost.
The affair also involved President Joe Biden giving statements at the White House. The President said that these measures will ensure that the banking system remains safe and sound.
As of mid-March, 11 banks, including JPMorgan, had poured $30 billion into the company. All this with the aim of curbing panic among the more serious deposits.
But the damage to the bank’s business model eventually led to its collapse and the acquisition of JP Morgan. Through this event, the concentration on the computer and the reaffirmed position of the Wall Street firm is very clear.
About Jamie Dimon, chairman and CEO of JP Morgan, said the offer was completed thanks to his capabilities, financial strength and business model.
So, 84 branches of First Republic opened as JP Morgan branches last Monday. Similarly, a Wall Street firm will take over a bankrupt company’s deposits and substantially all of its assets.
A downturn in the US economy?
Although a recession has been avoided for now, forecasts point to a deeper recession.
JP While it’s true that there are rules preventing banks like Morgan from absorbing their rivals, Biden supported the move. Likewise, he showed the world Washington’s urgency in dealing with the banking crisis.
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