WASHINGTON – President Joe Biden met with reporters on Monday at the Rose Garden in the White House to address the second-largest bank failure in U.S. history after Washington Mutual’s collapse in 2008.
Biden announced that regulators seized the First Republic Bank, the third midsize bank, after Silicon Valley Bank and Signature Bank, to fail in less than two months.
Biden said JPMorgan Chase, the largest bank in the U.S. with more than $3 trillion in assets, had acquired First Republic‘s $92 billion in deposits and $203 billion in loans and securities.
“These actions are going to make sure that the banks are safe and sound and that includes protecting small businesses across the country who need to make payroll for workers and small businesses,” Biden said.
First Republic, which began operations in 1985 in California, used deposits to fund low-interest rate loans that lost value when the Federal Reserve rapidly increased interest rates last year.
In March, First Republic’s wealthy clients withdrew about $100 billion in deposits. The bank’s stock dropped about 75% last week.
The regulators were with the Federal Reserve, The Federal Deposit Insurance Corporation, and the Treasury’s Office of Comptroller of the Currency.
DEPOSIT INSURANCE CAP
Also on Monday, The FDIC recommended that the U.S. change the policy of insuring up to $250,000 in bank deposits and offer higher levels for business accounts.
The Treasury announced plans to increase its borrowing amid a Congressional debate over the federal debt limit. The Federal Reserve is set to raise the interest rate again on Wednesday.
The White House was also hosting Philippines President Ferdinand Marcos, Jr., amid friction with China and concerns about North Korea, after hosting South Korean President Yoon Suk Yeol last week. Biden’s agenda includes trips to Japan and Australia in May.
Torres contributed to this report from Miami and Fernandez contributed to this report from Pembroke Park.