On Monday, the Federal Reserve offered its blessing for the latest JPMorgan financial rescue—in this case, the acquisition of First Republic, with an assist from the FDIC. Federal regulators waved a rule about the concentration of bank deposits in one institution and allowed JPMorgan Chase to get even bigger. “Goliath is winning,” the Wells Fargo banking analyst Mike Mayo told me on Monday afternoon.
Under the terms of the deal, JPM is buying substantially all of the assets and certain liabilities of First Republic from the FDIC, which had taken over the bank a few hours earlier. In return for a payment of $10.6 billion to the FDIC, JPM assumed some $173 billion of First Republic loans plus another $30 billion of securities and further assumed $92 billion of First Republic’s deposits.
