“The Federal Deposit Insurance Corporation (FDIC) has accepted a bid from JPMorgan Chase Bank to assume all deposits of First Republic Bank… The banking franchise was the envy of most of the industry and its clients mostly included the rich and powerful, who rarely defaulted on their loans.
Many of the bank’s deposits, however, were uninsured as they were above the $250,000 limit set by the FDIC. If First Republic were to fail, its depositors might not get all their money back, worrying analysts and investors alike.”
Analyst Comment: This is a bailout of wealthy account holders and a sweetheart deal for JP Morgan. Expect more regional bank failures over the next few months.