🤯 Picked by our AI, this stock rallied more than Nvidia this month, yielding 94% since MarchSee the stock

Sen. Warren seeks details on 'troubling' sale of First Republic to JPMorgan

Published 05/18/2023, 03:38 PM
Updated 05/19/2023, 10:50 AM
© Reuters. FILE PHOTO: A person walks past a First Republic Bank branch in San Francisco, California, U.S. April 28, 2023. REUTERS/Loren Elliott

By Pete Schroeder

WASHINGTON (Reuters) - U.S. Senator Elizabeth Warren is questioning federal bank regulators on their decision to sell First Republic Bank (OTC:FRCB) to the nation's largest bank, JP Morgan Chase (NYSE:JPM).

In a letter sent to the Office of the Comptroller of the Currency and Federal Deposit Insurance Corporation Wednesday, Warren said the deal was "deeply troubling," and sought details on how the agencies decided to arrange that particular sale, allowing JPM to grow even larger.

"The net result of these machinations is that...the nation’s biggest bank – already too big to fail – got a bargain deal on a failing bank that made it even bigger. This is a troubling outcome, leaving me with numerous questions," she wrote.

The FDIC announced this month it had seized First Republic and sold it to JPM in a deal that it estimated would cost its deposit insurance fund $13 billion. Spokespeople for the OCC and FDIC declined to comment. A JPM spokesperson did not respond to a request for comment.

Among other items, she asked regulators to provide details on how they analyzed bidders for the failed bank and what additional restrictions JPM should face as a result of its larger size.

© Reuters. FILE PHOTO: A person walks past a First Republic Bank branch in San Francisco, California, U.S. April 28, 2023. REUTERS/Loren Elliott

Warren also pressed the matter with Michael Hsu, the acting Comptroller of the Currency, at a hearing Thursday. She noted that the FDIC is bound by law to sell a bank to a bidder at the least cost to its deposit insurance fund, but the OCC should consider other factors, like financial stability, before signing off on such a merger.

Hsu said the OCC has to consider a range of factors in assessing a merger with a failed bank, with a focus on maintaining stability and "coordinated and timely" government action.

Latest comments

Loading next article…
Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.