JP Morgan Chase has agreed to pay $10.6bn to the Federal Insurance Deposit Corp (FIDC) after regulators closed First Republic Bank in San Francisco, which had been under pressure since last month when two other US banks collapsed. The closure of First Republic is the third in the US since March and is the second largest in US history.
It has prompted renewed political debate about financial regulation and the power of the largest banks. The bank had been valued at over $20bn at the beginning of last month, and was ranked as the 14th largest lender in the US at the end of last year. Its 84 offices across eight states will reopen as JPMorgan Chase Bank branches.
JP Morgan Chief Executive, Jamie Dimon, stated that few other banks were at risk of customers withdrawing deposits en masse, which had caused the problems at First Republic and the two other banks that had collapsed. However, he warned that down the road, rising rates, recession and real estate could pose a whole new issue.