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JPMorgan Acquires First Republic Bank In Mega Deal, Raising Concerns Over Banking Monopoly

TRUTH PUKE’S TAKE: JPMorgan Chase & Co has won the weekend auction of First Republic Bank, in a deal that is estimated to cost the FDIC’s Deposit Insurance Fund $13 billion. JPMorgan will pay $10.6 billion to the FDIC in exchange for taking control of most of the San Francisco-based bank’s assets, including its coveted wealthy client base.

First Republic’s shareholders will be wiped out in the transaction, and its shares tumbled 43.3% in premarket trading on Monday before they were halted. The deal is expected to make JPMorgan even bigger, increasing its net deposits by 3%. While analysts and industry executives believe the deal should calm markets, critics argue that the biggest banks getting stronger is harming community banks, small business lending, and economic growth.

The auction comes on the heels of a series of banking failures, including the closure of Silicon Valley Bank and Signature Bank in March, which caused deposit flight from U.S. lenders and forced the Fed to step in with emergency measures to stabilize the markets. Monetary policy is seen as one of the root causes of the crisis in the banking sector, with some experts arguing that the Fed has moved too far, too fast, and is breaking things.

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#BankingCrisis #JPMorganChase #FirstRepublicBank #bankingindustry #FDIC #economicgrowth

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