Markets
Do We Have a Banking Crisis? First Republic Bank Just Failed
May
Do We Have a Banking Crisis?- First Republic Bank FRC experienced a -43.30% decline, depicted by a red down-pointing triangle. Its customers have become JPMorgan Chase JPM customers after the banks and government officials announced a takeover agreement early Monday morning.
In a statement on First Republic’s website on Monday, JPMorgan reassured customers that their assets are now backed by JPMorgan’s fortress balance sheet, and all their deposits are secured. Bank branches opened as usual, and accounts were accessible Monday morning, but some of the details regarding customers’ accounts, loans, and mortgages are still being sorted out.
Do We Have a Banking Crisis? Here’s what you need to know:
Are my deposits secure?
JPMorgan Chase now holds First Republic customer assets, both insured and uninsured.
Now that the banks have merged, First Republic customers who already have accounts at JPMorgan Chase should consider whether their combined assets at both banks exceed the FDIC-insured $250,000 limit, says Greg McBride, Bankrate’s chief financial analyst.
JPMorgan, the most massive bank in the U.S., was designated as systemically significant or “too big to fail” after the 2008 financial crisis. That means it is subject to stricter regulatory requirements to safeguard customer deposits, and the U.S. government may intervene if the bank becomes distressed.
Will JPMorgan honr the deposit account yield I was receiving?
JPMorgan has said that any term deposits, such as certificates of deposit, will continue to earn the rate promised before the agreement. However, over time, the bank intends to set rates to be more in line with the rest of its business, according to executives who spoke with investors on Monday.
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In the first quarter, JPMorgan paid an average of 1.85% on deposits, compared to 2.14% at First Republic.
Mr McBride stated that customers should anticipate changes in the bank’s offerings, rates, and fees, but not immediately.
Can I access my First Republic accounts at Chase branches?
Not yet. As of now, nothing has changed in how customers bank.
First Republic branches will continue to service your accounts, which can still be accessed at FirstRepublic.com or its mobile app. Over time, First Republic branches will be rebranded under the Chase name, and the accounts will be integrated into the Chase network.
Will I be contacted by phone or text about my account?
Be cautious of phone or text messages claiming to be from JPMorgan Chase or First Republic that request your personal financial information. The bank will never ask you to transfer funds using Zelle, Wires, or ACH to protect your funds.
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