Less than two months after the collapse of two midsize financial institutions, First Republic took a dive and forced the federal government to intervene, NTD News reported earlier this week.
During National Small Business Week on May 1, Biden assured depositors of First Republic that they would be protected, whether insured or uninsured, and that taxpayers would not be responsible for any losses. Shareholders of the bank will lose their investments.
“These actions are going to make sure that the banking system is safe and sound,” the president said. “And that includes protecting small businesses across the country who need to make payroll for workers and their small businesses.”
“We have to make sure that we’re not back in this position again, and I think we’re well on our way to be able to make that assurance,” he claimed, obviously forgetting that Democrats assured us this wouldn't happen again after they passed massive new financial industry regulations following the Great Recession of 2008-09.
During his announcement for National Small Business Week from the White House on May 1, President Biden urged Congress to equip regulators with the necessary tools to hold all bank executives accountable. He also called on regulators to strengthen regulations and supervision of large and regional banks.
By the way, this chicanery is bipartisan. House Financial Services Committee Chairman Patrick McHenry (R-N.C.) praised the Federal Deposit Insurance Corp. (FDIC) for its swift action in resolving the issue, stating that the American people should have confidence in the safety of their deposits at U.S. banks.
“The question remains, why didn’t the FDIC do the same thing in March when SVB [Silicon Valley Bank] was placed into receivership?” McHenry said in a statement. “It’s critical that the Biden administration and its regulators not politicize these events.”
Praised the FDIC? Why didn't he rip the other federal agencies that were created to monitor banks (like the FDIC) and prevent their failure in the first place?
Last week, regulators took over First Republic Bank after its financial position worsened, estimating that the takeover would cost the deposit insurance fund (DIF) around $13 billion. That was in addition to the $22.5 billion the DIF already lost from the collapses of Silicon Valley Bank and Signature Bank.
Over the weekend, regulators held an auction for the company, which had $229 billion in assets and $104 billion in deposits, to solicit bids. “Our government invited us and others to step up, and we did,” said JPMorgan Chase CEO Jamie Dimon, announcing the purchase of First Republic, giving JPMC 10 percent of all Americans' bank holdings.
The announcement was made that JPMorgan, the nation's largest financial institution, would take over First Republic's 84 locations across eight states and convert them into JPMorgan branches, providing depositors with full access to their accounts.
Most of First Republic's clients were wealthy accountholders whose deposits exceeded the $250,000 limit for insurance. Similar to Silicon Valley Bank and Signature Bank, the collapse of these institutions resulted in significant account drawdowns, investor withdrawals, and traders selling shares. In March, First Republic reported a loss of $100 billion in deposits during the banking panic.
“There are only so many banks that were offsides this way,” Dimon told analysts in a call following the announcement. “There may be another smaller one, but this pretty much resolves them all. This part of the crisis is over.”
That is nonsense. These people lied to us before not 15 years ago and they are likely lying to us again. Yet Americans keep falling for the BS and reelecting the same dishonest clowns.
We have to break this cycle before these greedy sycophants destroy our country.
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