First Republic’s Rescue is a Sign of Consolidation in U.S. Banking Say Experts

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Experts say the acquisition of First Republic Bank by JPMorgan Chase is an indication of increasing consolidation in U.S. banking in which large banks become bigger and more powerful with the help of the FDIC.  JPMorgan, America’s largest bank, will benefit from this government-led deal according to Dick Bove, chief financial strategists at Odeon Capital, but it is a problem for America’s smaller lenders.  Bove said, “It is very good for JPMorgan, maybe a lot less good for American banking.”  The FDIC is taking First Republic’s losses, meanwhile JPMorgan is acquiring the bank’s real value without honoring the debt.  Since Silicon Valley Bank’s collapse in March, other bank failures have followed, setting off a “systemic crisis” in the financial sector.