JP Morgan has acquired First Republic Bank, the second-largest bank to collapse in US history.
👉 Background: First Republic is a commercial bank in the US that also offers wealth management services. When Silicon Valley Bank and Silvergate collapsed, many customers in the US were concerned for First Republic Bank too.
👉 What happened: Late last week, First Republic announced a loss of more than $US100 billion in deposits in the first quarter alone. Yikes. And then they struggled to produce a rescue plan that satisfied the regulators... So the regs stepped in and took possession of the bank.
👉 What else: Now, JP Morgan has acquired First Republic Bank, making it the second-largest bank by assets to collapse in US history.
💡In times of economic uncertainty, the old adage "the bigger banks get bigger" often rings true.
💡During these times, larger banks are able to take advantage of their size and financial stability to acquire smaller banks that are struggling, and the smaller banks are able to avoid liquidation and bankruptcy.
💡We saw this back in 2008, when JP Morgan Chase acquired Bear Stearns and Washington Mutual at bargain prices. But this means the concentration of power moves into the hands of fewer large financial institutions.
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