Federal Deposit Insurance Corporation has taken over First Republic Bank recently as a measure to prevent the bank from going under. As per FDIC officials, around 84 branches of this failed bank are spread across eight states that are in danger of shutting down.
JPMorgan has come forward to take over the failed bank and plans to reopen all the closed branches of First Republic Bank as soon as the business hours of the current day.
Media reports have confirmed that JP Morgan Chase is set to become the new owner of the $330 billion worth of AUM of First Republic, including deposits. FDIC officials have also issued a new public statement regarding the plans for the bank.
The statement suggests that the regulatory Insurance agency was appointed as the new guardian of the failed bank when it was closed down by the California Department of Financial Protection and Innovation authority.
Depositors of First Republic Bank can Access their Funds Under New Management
The National Association of JPMorgan Chase Bank is set to assume access and control of the First Republic Bank. The depositors of the bank will be able to access their funds under the new management. FRB is the 3rd major banking collapse in recent months.
However, FDIC has maintained that it is going to continue to insure deposits of this bank. The government agency has also added that FRB consumers will maintain the same banking experience as before and will maintain their deposit insurance.
It also means that the 84 branches of this bank are going to reopen as a regular businesses during working hours across all eight states. JPMorgan has conducted a loss-share transaction with FDIC. It means that there is going to be minimal disruption for the consumers of the failed banking enterprise.
At the same time, the private sector will be able to make a fast recovery of their assets. FDIC has estimated that the outstanding cost to cover deposit insurance is around $13 billion.
First Republic Bank stocks were at a peak price of $219 in November 2021. However, 2022 was a year of conservative returns for the stocks of FBR. The catastrophe struck the bank when news about a sudden 40% decline in FBR deposits hit the markets within 22 days.
Several financial analysts identified First Republic Bank alongside Credit Suisse among the banking enterprises that were undergoing a tough time.
The looming banking crisis in the USA has already drowned Silicon Valley Bank, Signature Bank, and Silvergate. However, the financial environment in the USA is far from deteriorating since most of the collapsed banks are ranked in the small-cap category.
CNBC has reported that Dow has improved since the news about JPMorgan Chase’s purchase of FRB became public. Meanwhile, this news has also impacted the crypto market, with Bitcoin and Ethereum prices lowering two percent.
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