The California Department of Financial Protection and Innovation announced today, Monday, that regulators have taken control of First Republic Bank, marking it as the third major U.S. bank to collapse in two months. The department appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver for First Republic Bank and stated that it had accepted an offer from JPMorgan Chase and others to guarantee all deposits.
The FDIC, the U.S. Treasury Department, and the Federal Reserve held meetings with financial firms to rescue First Republic Bank. Sources familiar with the matter indicated earlier this week that JPMorgan was among several companies interested in acquiring the bank, including PNC Financial Services Group and Citizens Financial Group, which submitted final bids yesterday, Sunday, in an auction organized by U.S. regulators.
The FDIC estimated in a statement that the cost to the Deposit Insurance Fund will be approximately $13 billion, and the final cost will be determined once the agency concludes the receivership.
