The deal involves JP Morgan paying $10.6bn to the Federal Deposit Insurance Corp. He addressed analysts following a frantic 48 hours ending on Monday morning with JP Morgan agreeing to take on First Republic’s $173bn of loans and $92bn of deposits after regulators seized the troubled bank. Mr Dimon cautioned there could yet be further trouble further down the track given higher interest rates, but recommended taking a “deep breath” as the banking system is “very stable”. JPM was already a hugely significant player that has now managed to make itself even more so at a time when 'too-big-to-fail' is still a political concern.”
“The only worry we have is the at-present unknowable. Scott Siefers and Frank Williams, at Piper Sandler, said: “JP Morgan had already been the go-to deposit destination for nervous customers, and now it is officially taking a problem institution out of the game and easing concerns again. The Telegraph estimates suggest it now holds an estimated 14.2pc of US deposits, or $2.47trn, compared to 13.7pc previously.īanks normally have to get regulatory approval to takeover deposits if they already control more than 10pc of US deposits, but this does not apply to deals where the target is in receivership. The latest deal strengthens JP Morgan’s position as the US’s foremost lender, but will potentially trigger concerns that it is becoming too systemically important. Jamie Dimon – who led JP Morgan through the 2008 financial crisis – said there was a limit to the number of banks that would collapse under the forces that have felled First Republic, Silicon Valley Bank and Signature Bank and the latest failure “pretty much resolves them all”.īut there is growing disquiet that America's largest bank is fast becoming “too big to fail”. The chief executive of JP Morgan Chase has claimed the immediate US banking crisis is “over” as he stepped in to rescue its third victim in two months, the Californian lender First Republic.
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