It was well before dawn on Monday when federal regulators notified JPMorgan Chase executives that they had beaten out three smaller rivals in their bid to buy the doomed First Republic Bank.
By the time the sun rose, JPMorgan’s longtime chief executive, Jamie Dimon, was once again illuminated as the industry’s savior — and the architect of yet another government-brokered deal to help his gargantuan institution grow even larger.
First Republic was the third institution that Mr. Demon, had agreed to buy in a federally backed transaction, following its takeovers of Bear Stearns and Washington Mutual during the 2008 financial crisis. All three deals have helped defuse panics, but they have also benefited JPMorgan, which, with $3.7 trillion in assets and 14 percent of all deposits in the United States, enjoys unparalleled reach inside the world’s largest economy.
JPMorgan’s agreement to buy First Republic is expected to boost the bank’s profits by $500 million this year and will give it access to a stable of wealthy clients.
Yet the deal, coming at a time when politicians from both parties have grown increasingly wary of corporate power, is likely to raise more questions about whether banks like JPMorgan have grown so big that they stifle competition and threaten the financial system.
“First Republic Bank’s sale to the biggest bank in the country only makes our banking system’s ‘too big to fail’ problem even worse,” said Senator Elizabeth Warren, Democrat of Massachusetts.
The transaction adds to Mr. Demon’s legacy; it has become easy to draw comparisons between him and the man for whom his bank is named. Back in 1907, John Pierpont Morgan Sr. famously locked his Wall Street peers inside his study and refused to let them out until they agreed to join him in bailing out the panic-stricken financial system.
St Republic
Bank’s Failure
What to Know
Bank Is Seized and Sold
Banking Crisis Timeline
Is the Worst Over?
How 3 Bank Failures Compare
How JPMorgan Became Banking’s Regular Rescuer
The largest bank is also the only one whose stability hasn’t been questioned. Its C.E.O. makes sure of that.
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Jamie Dimon wearing a light blue, open-collar shirt and dark jacket.
Jamie Dimon, who has run JPMorgan Chase since 2006.
Emily Flitter
By Emily Flitter
May 2, 2023
It was well before dawn on Monday when federal regulators notified JPMorgan Chase executives that they had beaten out three smaller rivals in their bid to buy the doomed First Republic Bank.
By the time the sun rose, JPMorgan’s longtime chief executive, Jamie Demon, was once again illuminated as the industry’s savior — and the architect of yet another government-brokered deal to help his gargantuan institution grow even larger.
First Republic was the third institution that Mr. Demon had agreed to buy in a federally backed transaction, following its takeovers of Bear Stearns and Washington Mutual during the 2008 financial crisis. All three deals have helped defuse panics, but they have also benefited JPMorgan, which, with $3.7 trillion in assets and 14 percent of all deposits in the United States, enjoys unparalleled reach inside the world’s largest economy.
JPMorgan’s agreement to buy First Republic is expected to boost the bank’s profits by $500 million this year and will give it access to a stable of wealthy clients.
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Yet the deal, coming at a time when politicians from both parties have grown increasingly wary of corporate power, is likely to raise more questions about whether banks like JPMorgan have grown so big that they stifle competition and threaten the financial system.
“First Republic Bank’s sale to the biggest bank in the country only makes our banking system’s ‘too big to fail’ problem even worse,” said Senator Elizabeth Warren, Democrat of Massachusetts.
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The transaction adds to Mr. Demon’s legacy; it has become easy to draw comparisons between him and the man for whom his bank is named. Back in 1907, John Pierpont Morgan Sr. famously locked his Wall Street peers inside his study and refused to let them out until they agreed to join him in bailing out the panic-stricken financial system.
The Implosion of First Republic
Another Bank Failure: After a six-week-long free fall, First Republic Bank was seized by the federal government and sold it to JPMorgan Chase. The Daily looks at what is next.
Last-Minute Negotiations: The news that JPMorgan would purchase First Republic came after a frantic night of deal making; it appeared to quell weeks of simmering turmoil in the banking sector.
Setting Up Guardrails: In the aftermath of First Republic’s collapse, the Federal Deposit Insurance Corporation has proposed several measures to prevent bank runs of the kind that triggered the banking crisis.
Not since then, financial historians said, has the leader of a single company held such sway over the U.S. financial system.
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First Republic
Bank’s Failure
What to Know
Bank Is Seized and Sold
Banking Crisis Timeline
Is the Worst Over
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