Yet another U.S. midsize bank has collapsed, but the chief executive of JPMorgan Chase Bank is optimistic that the country is nearing the end of the banking crisis.
“This part of the crisis is over,” Jamie Dimon told analysts Monday during a conference call addressing the bank’s takeover of First Republic Bank.
Regulators seized First Republic early Monday and sold its deposits and most assets to JPMorgan Chase. It was the second-largest bank failure in U.S. history behind Washington Mutual, which was also taken over by JPMorgan during the 2008 financial crisis. Two other midsize banks, Silicon Valley Bank and Signature Bank, collapsed in March.
Is the banking system stable?
Dimon said there’s a chance “another smaller” bank fails, but “this pretty much resolves them all.”
“I think the banking system is very stable,” he said. While there are still concerns over rising interest rates and the potential for a recession, “everyone should just take a deep breath.”
Is the banking crisis over?
Dimon’s comments echo earlier statements made last month, when he told CNN “I think we’re getting near the end of this particular crisis.”
The Federal Deposit Insurance Corporation said First Republic Bank’s 84 branches will reopen as branches of JPMorgan Chase Bank and assured depositors that they will have full access to all deposits. JPMorgan said it would absorb approximately $173 billion in First Republic loans and approximately $30 billion in securities.
What Biden is saying about the First Republic takeover
President Joe Biden said he’s pleased regulators acted to facilitate the sale of First Republic to ensure that depositors are protected and taxpayers are not on the hook.
“These actions are going to make sure the banking system is safe and sound. That includes protecting small businesses across the country who need to make payroll for workers and their small businesses,” he said. “We have to make sure that we’re not back in this position again. And I think we’re well on our way to be able to make that assurance.”
Contributing: USA TODAY reporter Maureen Groppe
