acquisition of assets for 229 billion – Corriere.it
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JPMorgan Chase & Co will bail out First Republic Bank. This was announced in a statement by the US regulatory authority, explaining that the American banking giant has reached un agreement to sell most of the bank’s assets, held by the Federal Deposit Insurance Corporation (Fdic). The operation will cost 229.1 billion dollars. The Wall Street Journal explains that it is the second largest bank failure in US history which in the last two months has seen the three most bank crashes, including Silicon Valley Bank and Signature Bank.
The risk of contagion
The US supervisors worked all night to find a solution by the time the Asian stock exchanges opened and in time to provide the financial markets open on May 1st with a crisis that had already been resolved. By midnight (US time), the institutions concerned should have formally delivered their offer, whatever it was to take over First Republic Bank in whole or in part. Jp Morgan, according to government sources, was already ready for an agreement, but Pnc Financial Services, Citizens Financial Group, Us Bancorp and Bank of America have also come forward. The operation is necessary because, in the event of failure to contain the crisis, the San Francisco bank risks once again infecting the entire banking system, as was the case on March 10 after the Silicon Valley Bank.
Lost deposits of 100 billion
Already in March the lender, the 14th in the United States, had been provided with a safety net with a 30 billion dollar injection from the largest American banks. The stock market crash, however, has not ended: First Republic shares have lost more than 97% of their value in these first months of 2023, pushed downwards by worries about losses in value on its mortgage portfolio and other assets and by the massive outflows of deposits (about 100 billion dollars). Last week, precisely on April 26, however, investor fears grew after yet another capitalization decline market share of the bank, which fell below 1 billion dollars.
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