JPMorgan Chase, a sizable investment company, will take over deposits and assets worth more than $330 billion from First Republic Bank which is struggling. According to a FDIC statement on May 1, the FDIC was appointed as the recipient of the First Republic of the Bank after being closed by the California Department of Financial Protection and Innovation.
"All First Republic Bank deposits will become JPMorgan Chase Bank, National Association, and will have full access to all their deposits," the statement said.
First Republic Bank is the 3rd largest bank in the United States to collapse in recent months. Meanwhile, the FDIC ensures that bank deposits remain insured and First Republic Bank customers do not need to change their banking ties to maintain deposit insurance.
The regulator said that 84 First Republic Bank offices in eight states would reopen as JPMorgan branches during today's working hours. The FDIC states that they are making transactions for loss with JPMorgan.
According to the agency, the transaction will minimize interference for bank customers who fail and help maximize asset recovery while maintaining them in the private sector.
"It is estimated that the cost for the Deposit Insurance Fund will be around USD 13 billion (IDR 191 trillion)," explained the FDIC.
Last week, First Republic Bank's shares fell sharply after news that its deposits fell 40 percent in 22 days. At that time, industry observers speculated that the bank would be the next victim of a banking crisis that has swallowed Silicon Valley Bank and Signature Bank.
Meanwhile, the news has led to light sales in the crypto market. Bitcoin (BTC) and Ethereum (ETH) fell more than 2 percent at this time. Reporting from Cryptoslate, the crypto market tends to respond when there is a financial crisis in the traditional banking sector for different reasons.
Some investors are tempted to move their assets to cryptocurrencies, while others may worry that the banking crisis could trigger an overall market decline.
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