Elizabeth Warren, a Democratic Senator worried as JPMorgan Chase once again rescued a doomed bank acquisition. JPMorgan has taken over First Republic Bank. Meanwhile, Elizabeth Warren fears that federal regulators only made the problems too big to fail and problems to get worsened.
In a statement Warren told CNN on Tuesday in her on-camera interview regarding the First Republic failure. Based on Warren’s analysis, First Republic was under-regulated and began to fail. On the other hand, the federal government has supported JPMorgan Chase to get even bigger.
Apparently, JPMorgan agreed to pay the Federal Deposit Insurance Corporation for as much as $10.6 billion. This is in order to buy most of First Republic acquisition especially after regulators shut the large regional bank. In order to relieve investors as well as bank customers, the JPMorgan deals are finally able to protect First Republic’s depositors.
Warren added that it seems to look good today while everything’s flying high. However, if JPMorgan Chase stumbles, the American taxpayers are the ones who will be on the line. Therefore, Warren fears as JPMorgan gets much bigger. CNN asked her about the decision to let JPMorgan get even bigger. It might give her pause about how Biden-appointed regulators have handled the crisis.
Her response is that it is better for a different bank to buy First Republic. Based on Warren’s opinion, there are many bidders in the bloc. Plus, the other bidder was much smaller than JPMorgan Chase. She noted that it is significant to look at the effect on competition. Thus, they can keep a more diversified banking system. So, she believes that somebody else should have bought the bank. Thus, it is better to let somebody else take over First Republic assets.
