<script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-2329455762588068" crossorigin="anonymous"></script><a href="https://www.todaynewspost.net/biden-assures-stability-of-us-banking-system-following-jp-morgans-acquisition-of-first-republic-bank/"><img class="alignnone wp-image-3349" src="https://www.todaynewspost.net/wp-content/uploads/2023/05/cyjqtoaj-300x135.jpg" alt="" width="1120" height="504" /></a> <ins class="adsbygoogle" style="display: block; text-align: center;" data-ad-layout="in-article" data-ad-format="fluid" data-ad-client="ca-pub-2329455762588068" data-ad-slot="7944307428"></ins><a href="https://www.todaynewspost.net/biden-assures-stability-of-us-banking-system-following-jp-morgans-acquisition-of-first-republic-bank/"><span style="color: #0000ff;">Biden emphasizes stability of US banking system after First Republic Bank's emergency sale to JP Morgan Chase</span></a><!--nextpage--> <div class="relative lg:w-[calc(100%-115px)] w-full flex flex-col justify-center"> <div class="min-h-[20px] word-break flex flex-col items-start gap-4"> <div class="request-:R2d6:-0 markdown prose dark:prose-invert break-words light"> <h5><span style="color: #0d0d0d;">Biden emphasizes stability of US banking system after First Republic Bank's emergency sale to JP Morgan Chase</span></h5> <h5><span style="color: #0d0d0d;">US President Joe Biden is seeking to calm concerns of further disruptions in the banking system after the troubled regional bank First Republic was acquired by JP Morgan Chase. The President praised the steps taken by the Federal Deposit Insurance Corporation, which included placing the bank under receivership and selling major business operations to JP Morgan.</span></h5> <h5><span style="color: #0d0d0d;">"These measures ensure that the banking system is secure and healthy," said Biden. Taxpayers are not burdened by the rescue operation. Biden reiterated his call for stricter supervision and regulation of both large and regional banks, as he did following the collapse of Silicon Valley Bank in mid-March.</span></h5> <h5><span style="color: #0d0d0d;">First Republic is the third US bank in two months to face collapse due to the mass withdrawal of customer deposits. Prior to First Republic, Silicon Valley Bank and Signature Bank were saved by early action. This has sparked concerns of a new banking crisis, especially as Swiss bank Credit Suisse has faltered and is now being taken over by domestic rival UBS in a multi-billion-dollar bailout.</span></h5> <h5><span style="color: #0d0d0d;">Mainly wealthy customers with high savings in First Republic</span></h5> <h5><span style="color: #0d0d0d;">Over the weekend, regulators worked to find a solution for the institution before the US markets opened on Monday. "Our government has asked us and others to take action, and we have done so," said JP Morgan Chase's CEO Jamie Dimon. The bank's 84 branches in eight US states have already reopened as JP Morgan Chase branches.</span></h5> <h5><span style="color: #0d0d0d;">At the end of last year, the US Federal Reserve ranked the institution as the 14th largest US commercial bank. However, First Republic, based in San Francisco, has faced difficulties since the collapses of Silicon Valley Bank and Signature Bank in early March. Until then, the industry had envied First Republic's business with mostly wealthy customers who rarely defaulted on their loans. The bank earned most of its money from low-interest loans to wealthy clients, including the CEO of Meta, Mark Zuckerberg.</span></h5> <h5><span style="color: #0d0d0d;">However, the vast majority of deposits, like Silicon Valley Bank and Signature Bank, were uninsured because they exceeded the FDIC's limit of $250,000. Analysts and investors became worried that in the event of First Republic's bankruptcy, they might not get all of their money back.</span></h5> <h5><span style="color: #0d0d0d;">Rescue operation by large banks - stocks at record lows</span></h5> <h5><span style="color: #0d0d0d;">These fears were reflected in the bank's recent quarterly results. According to their report, investors withdrew more than $100bn from the bank during the crisis in April. The bank was only saved due to a group of large banks intervening with $30bn in uninsured deposits.</span></h5> <h5><span style="color: #0d0d0d;">Afterwards, First Republic sought ways to restructure by selling unprofitable assets, including low-yielding mortgages given to wealthy customers. In addition, the bank announced it would lay off up to a quarter of its workforce, which amounted to around 7,200 employees by the end of 2022.</span></h5> <h5><span style="color: #0d0d0d;">However, investors remained sceptical. The bank's executives have not answered questions from investors or analysts since the quarterly results were announced, and the stock of First Republic continued to decline. On Friday, the bank's shares were temporarily suspended from trading.</span></h5> </div> </div> <script async src="https://pagead2.googlesyndication.com/pagead/js/adsbygoogle.js?client=ca-pub-2329455762588068" crossorigin="anonymous"></script> <ins class="adsbygoogle" style="display: block; text-align: center;" data-ad-layout="in-article" data-ad-format="fluid" data-ad-client="ca-pub-2329455762588068" data-ad-slot="7944307428"></ins> </div>
