JPMorgan’s acquisition of First Republic revives too-big-to-fail talk

JPMorgan Chase’s purchase of First Republic Bank is intended to end a budding financial crisis, but it risks doing so by reviving a political battle over the power of the nation’s largest financial institutions. Already the largest U.S. bank with its more than $3.2 trillion in assets, JPMorgan added an additional $200 billion in loans and securities by acquiring First Republic in a pre-dawn transaction with the Federal Deposit Insurance Corp….“Thirteen years after Congress told them to prepare to resolve these banks, they still couldn’t do it to two medium-sized, non-complex banking organizations, and now here’s a third,” said Karen Petrou, managing partner of Federal Financial Analytics, a Washington consultancy. “This is a very high-cost resolution.” Indeed, the FDIC’s $35.5 billion estimated tab for the three bank failures exceeds the $34.1 billion in insurance premiums that the FDIC collected from the second quarter of 2018 to the end of last year, according to Bert Ely, a banking consultant in Alexandria, Va.