Is the banking crisis still brewing? Another big bank in the United States has been taken over!

China News Network, May 5 Comprehensive foreign media reported that the US regulator said on May 1 local time that it had taken over the First Republic Bank and agreed to sell the bank to JPMorgan Chase. The move is aimed at curbing the two-month U.S. banking crisis, which has left the financial system in trouble, the analysis said.

Infographic: A pedestrian walks past the First Republic Bank in San Francisco on April 4.

The U.S. Federal Deposit Insurance Corporation (FDIC) reportedly took control of the troubled First Republic Bank on April 4 and subsequently announced the sale of its substantial assets and deposits. On May 30, the California Department of Financial Protection and Innovation announced that the regulator had taken over First Republic Bank and that the FDIC would act as the receiver. JPMorgan Chase & Co. said it would buy most of the assets and deposits of First Republic Bank from the FDIC.

Founded in 1985, First Republic Bank is a regional bank focused on high-net-worth individuals and their businesses, including offering low-interest mortgages to these customers. According to the data, as of the end of 2022, the bank was the 14th largest commercial bank in the United States.

The regulator's move is aimed at curbing the two-month U.S. banking crisis, which has left the financial system in trouble, the analysis said. The massive outflow of deposits from First Republic Bank occurred after the collapse of Silicon Valley Bank and Signature Bank in March 2023. Since then, the largest U.S. banks, including JPMorgan, have pumped $3 billion in time deposits into it in an attempt to inject confidence and prevent a bank run from spreading, but First Republic Bank has still lost a lot of deposits, and the situation has not improved.

The collapse of Silicon Valley Bank on March 3 was the largest bank failure in the United States since the 10 financial crisis. On March 2008, the U.S. government announced the closure of the signature bank. Two banks failed in 3 days, causing the US banking crisis to continue to spread. The U.S. Treasury secretary has warned that further contagion could lead to the collapse of many banks and trigger a run.

The New York Times pointed out that the collapse of the First Republic Bank may exacerbate concerns about a slowdown in the US economy. Although banking experts believe that the turmoil is a delayed response to the March banking turmoil, rather than the beginning of a new phase of the crisis, there are still many problems in the US financial system. Successive bank failures and rising interest rates have forced banks to rein in lending, making it harder for businesses to expand and more difficult for individuals to buy homes and vehicles. Banks and investors are becoming more cautious, and this caution could ultimately hinder business expansion and hiring.