President Joe Biden hailed regulators for facilitating a deal for JPMorgan Chase & Co. to acquire First Republic Bank, saying it would help stabilize the US banking system and protect taxpayers.
(Bloomberg) — President Joe Biden hailed regulators for facilitating a deal for JPMorgan Chase & Co. to acquire First Republic Bank, saying it would help stabilize the US banking system and protect taxpayers.
“These actions are going to make sure that the banking system is safe and sound. And that includes protecting small businesses across the country who need to make payroll for workers and their small businesses,” Biden said at the White House on Monday. “Let me be very clear, while all depositors are being protected, shareholders are losing their investments, and critically, taxpayers are not the ones that are on the hook.”
The development makes the biggest US bank even larger, a potential lightning rod that will fuel calls from Democrats to strengthen oversight of the banking industry.
A Treasury Department spokesperson issued a statement Monday saying the agency was encouraged by the outcome and that the US banking system remains sound.
Read more: JPMorgan Ends First Republic’s Turmoil After FDIC Seizure
Biden — who didn’t mention JPMorgan by name in his Monday remarks — has sought to reassure consumers and markets that the US financial system is on solid footing. He has urged Congress to approve tougher penalties on banking executives if their mismanagement contributed to institutions failing.
A financial crisis would pose a serious challenge to Biden’s reelection bid, which he formally announced last week.
“Going forward, I called on Congress to give regulators the tools to hold bank executives accountable. And I’ve called on regulators to strengthen regulations and supervision of large and regional banks,” he said Monday.
“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.”
JPMorgan acquired about $173 billion of First Republic’s loans, $30 billion of securities and $92 billion in deposits, and agreed with the Federal Deposit Insurance Corp. to share the burden of losses and recoveries from single-family and commercial loans, the agency said in a statement.
“This is getting near the end of it, and hopefully this helps stabilize everything,” JPMorgan Chief Executive Officer Jamie Dimon said on a call with journalists Monday.
–With assistance from Jenny Surane, Hannah Levitt, Katanga Johnson, Justin Sink and Jennifer Jacobs.
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