4 ms·

In this case > All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of t

by zamnos 3y ago

In this case > All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits.

pjc50 3y ago
Indeed - the government isn't taking responsibility, they've leaned on the private sector to sort this out among themselves. (Matt Levine et al have argued that the SV VC community should have taken over more, or indeed any, of the rescue role, since they were responsible for overweighting SVB and then bankrunning it. But that hasn't happened)
- JumpCrisscross 3y ago
  > the government isn't taking responsibility Ish. The loss-sharing transaction does involve the FDIC taking risk [1]. They claim they will settle up actual losses with special assessments on their members. And there may be no losses at all. But there is definitely risk being assumed by the FDIC, an entity backed by the full faith and credit of the United States. It also looks like the FDIC is providing JPMorgan with a $50bn term loan [2]. (Shout out to snake_doc [3].) [1] https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/lossshare/ https://www.fdic.gov/resources/resolutions/bank-failures/fai... [2] https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-substantial-majority-of-assets-and-assumes-certain-liabilities-of-first-republic-bank https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-sub... [3] https://news.ycombinator.com/item?id=35770684 https://news.ycombinator.com/item?id=35770684
  - aero-glide2 3y ago
    "The FDIC is not supported by public funds; member banks' insurance dues are its primary source of funding."
    - ceejayoz 3y ago
      The FDIC is not normally supported by public funds. If it ran out of money, it's nearly certain the government would step in to cover the shortfall.

4 ms·

In this case > All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of t

by zamnos 3y ago

In this case > All depositors of First Republic Bank will become depositors of JPMorgan Chase Bank, National Association, and will have full access to all of their deposits.

pjc50 3y ago
Indeed - the government isn't taking responsibility, they've leaned on the private sector to sort this out among themselves. (Matt Levine et al have argued that the SV VC community should have taken over more, or indeed any, of the rescue role, since they were responsible for overweighting SVB and then bankrunning it. But that hasn't happened)
- JumpCrisscross 3y ago
  > the government isn't taking responsibility Ish. The loss-sharing transaction does involve the FDIC taking risk [1]. They claim they will settle up actual losses with special assessments on their members. And there may be no losses at all. But there is definitely risk being assumed by the FDIC, an entity backed by the full faith and credit of the United States. It also looks like the FDIC is providing JPMorgan with a $50bn term loan [2]. (Shout out to snake_doc [3].) [1] https://www.fdic.gov/resources/resolutions/bank-failures/failed-bank-list/lossshare/ https://www.fdic.gov/resources/resolutions/bank-failures/fai... [2] https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-substantial-majority-of-assets-and-assumes-certain-liabilities-of-first-republic-bank https://www.jpmorganchase.com/ir/news/2023/jpmc-acquires-sub... [3] https://news.ycombinator.com/item?id=35770684 https://news.ycombinator.com/item?id=35770684
  - aero-glide2 3y ago
    "The FDIC is not supported by public funds; member banks' insurance dues are its primary source of funding."
    - ceejayoz 3y ago
      The FDIC is not normally supported by public funds. If it ran out of money, it's nearly certain the government would step in to cover the shortfall.