How Washington Got on Board With a Big-Bank Deal for First Republic
By Ben Eisenand Andrew Ackerman
Federal regulators wanted a strong deal for First Republic Bank. As a result, they helped America’s largest lender get even bigger. JPMorgan Chase JPM 2.14%increase; green up pointing triangle
beat out bids from at least three smaller peers, according to people familiar with the matter. The bank said it had some 800 people working over the weekend to scour First Republic’s books and assess its business…“I’m not opposed to what was done, but I do think the lack of options speaks to a truly bankrupt resolution process,” said Karen Petrou, managing partner of Federal Financial Analytics, a regulatory advisory firm for the banking industry. The largest U.S. banks grew rapidly in the decade after the last financial crisis, benefiting in part from the presumption that they were too important to the financial system to be allowed to fail. They became fabulously profitable, putting them in position to weather the regional bank meltdown of the last two months—and even thrive. JPMorgan led a group of 11 banks to temporarily rescue First Republic in March by depositing $30 billion at the bank to help replenish the money that customers withdrew in a panic after two midsize banks failed in one weekend.