Aimee Picchi with CBS News’ Money Watch (“CBS News“) is reporting that First Republic Bank was teetering with insolvency for weeks before regulators seized it today. Regulators accepted a bid from banking giant JPMorgan Chase to acquire nearly all of bank’s assets.
The California Department of Financial Protection and Innovation took over the bank and then appointed the Federal Deposit Insurance Corporation (“FDIC”) as the bank’s receiver. JPMorgan Chase, which contributed part of the $30 billion in March to help stabilize the bank, has bought the bulk of the bank’s operations and assets from the FDIC.
The CBS News report may be read HERE.
REUTERS is also reporting on this matter. The REUTERS article may be read HERE.
My brothers and sisters, this trend is very concerning and what strikes this writer is that for many decades there have been signs on the walls of banks making it exceedingly clear that the FDIC only insures deposits of up to $250,000.
One doesn’t have to be a trained and experienced lawyer to understand the concept of establishing a precedent – from which everyone will demand federal monies (read: our tax dollars) to be used for bailing out financial institutions beyond the statutory limitations. And meanwhile, lower-level share holders (read: folks like you and me) will suffer the losses.
