FINANCEREGULATION

Traditional bank crisis continues to spread, FDIC plans to take over First Republic Bank, JPMorgan Chase and PNC express interest in acquisition.

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Traditional bank crisis continues to spread, FDIC plans to take over First Republic Bank, JPMorgan Chase and PNC express interest in acquisition.

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FDIC Plans to Take Over First Republic Bank, FRC

Reuters reported that the U.S. Federal Deposit Insurance Corporation (FDIC) is preparing to take over First Republic Bank.

A source familiar with the matter, who requested anonymity due to the sensitivity of the issue, stated that the U.S. banking regulators have made the decision as they believe the situation at First Republic Bank has further deteriorated, leaving no more time to seek help from other private sectors, and FDIC could potentially seize and sell First Republic Bank as early as this weekend.

Major Financial Institutions Competing to Acquire First Republic Bank

According to the Wall Street Journal, J.P. Morgan Chase, and PNC Financial Services Group are also rumored to be interested in acquiring First Republic Bank, with the deal expected to proceed after the government takeover.

Spokespersons for First Republic Bank, PNC, FDIC, and J.P. Morgan all declined to comment on the news.

First Republic Bank Could Become the Fourth Bank to Fail Recently

On April 24, First Republic Bank released a dismal quarterly earnings report, indicating a 41% decline in total deposits to $104.5 billion in the first quarter, including a $30 billion infusion from 11 of the largest U.S. banks.

Details from First Republic Bank's Quarterly Earnings Report: Bitcoin Approached $30,000, First Republic Bank Crisis, Debt Ceiling Concerns Spark Market Worries

First Republic Bank could potentially become the fourth bank to face bankruptcy since a series of banking crises in March.

Since rumors of a bank run began in early March, First Republic Bank's stock price has plummeted from $122 to $3.51, a 97% decrease.

March 8: Crypto-friendly bank Silvergate decided to cease operations and undergo liquidation.

March 20: Signature Bank took over digital banking-related deposits as Flagstar Bank abandoned the business.

March 26: First-Citizens Bank formally acquired Silicon Valley Bridge Bank for $16.5 billion.

BitMEX Co-Founder Has Long Been Bearish on First Republic Bank

BitMEX co-founder Arthur Hayes expressed on April 26:

First Republic Bank opened down 15% again, and I would be surprised if they are not taken over by FDIC this weekend.

He believes that whether:

  1. The government prints money to support banks through crises

  2. Ignoring bank bankruptcies that affect depositors

Both will amplify traditional banking problems, with users feeling like they are playing roulette with their deposits. This uncertainty will continue to drive up assets like gold and bitcoin.