First Republic Bank sale will ensure that ‘banking system is safe and sound,’ Biden says
President Biden says the purchase of First Republic will ensure the banking system is 'safe and sound'
Treasury Department praises First Republic Bank sale to JPMorgan: System remains 'sound and resilient'
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President Biden said Monday that the Federal Deposit Insurance Corporation’s acceptance of a bid from JPMorgan Chase Bank to assume all deposits of First Republic Bank will ensure that the U.S. banking system is "safe and sound."
Biden made the comment from the White House’s Rose Garden as he and Vice President Harris delivered remarks on National Small Business Week.
"I am pleased to say that the regulators have taken action to facilitate the sale of First Republic Bank and ensure that all depositors are protected and the taxpayers are not on the hook," Biden said.
"These actions are going to make sure that the banking system is safe and sound, and that includes protecting small businesses across the country who need to make payroll for workers and their small businesses," the president added.
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President Biden speaks in the Rose Garden of the White House on Monday about National Small Business Week. (AP/Susan Walsh / AP Newsroom)
"Going forward, I've called on Congress to give regulators the tools to hold bank executives accountable, and I've called on regulators to strengthen regulations and supervision of large and regional banks," Biden continued. "And, folks, we have to make sure that we're not back in this position again. And think we're well on our way to be able to make that assurance."
The San Francisco-based First Republic Bank has struggled since the collapse of Silicon Valley Bank and Signature Bank in early March.
The California Department of Financial Protection and Innovation (DFPI) announced early Monday morning the FDIC’s acceptance of a bid from JPMorgan Chase Bank in regards to First Republic Bank.
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A pedestrian walks past a First Republic Bank in San Francisco on April 26, 2023. (AP Photo/Jeff Chiu / AP Newsroom)
"The DFPI appointed the Federal Deposit Insurance Corporation (FDIC) as receiver of First Republic Bank. The FDIC has accepted a bid from JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all deposits, including all uninsured deposits, and substantially all assets of First Republic Bank," a press release from DFPI said.
Investors and depositors grew increasingly worried First Republic Bank may not survive as an independent entity due to its high amount of uninsured deposits and exposure to low-interest rate loans. But, the purchase agreement includes all uninsured deposits and substantially all its assets.
"The DFPI took action pursuant to California Financial Code section 592, subdivisions (b) and (c), specifically ‘conducting its business in an unsafe or unsound manner’ and being in a ‘condition that… is unsafe or unsound’ to transact banking business," the release said.
JPMorgan Chase Bank is buying First Republic Bank, it was announced Monday. (Spencer Platt/Getty Images / Getty Images)
It added: "As of April 13, 2023, First Republic Bank, based in San Francisco, had total assets of approximately $229.1 billion and total deposits of approximately $103.9 billion. Its deposits are federally insured by the FDIC subject to applicable limits."
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First Republic Bank’s stock closed at $3.51 on Friday. Last year, it traded at $170 a share.
Fox News’ Lawrence Richard and the Associated Press contributed to this report.