What we’re reading (5/1)
“Jamie Dimon Wins Again In First Republic Bank Deal” (Wall Street Journal). “JPMorgan used its huge balance sheet to beat out smaller banks for First Republic, which was seized early Monday by the Federal Deposit Insurance Corp. First Republic collapsed after losing $100 billion in deposits in a March run that followed the implosion of fellow Bay Area lender Silicon Valley Bank.”
“First Republic Bank Collapse Spurs Fears For Banking System, Broader Economy” (The Hill). “Monday’s shutdown marks the nation’s second-largest bank failure — First Republic Bank had nearly $230 billion in assets last month — eclipsing the Silicon Valley Bank collapse. Three of the four largest bank failures in U.S. history have taken place over the last two months.”
“First Republic’s Pain Had A Lot To Do With Its Reliance On Wealthy Clientele” (CNN Business). “First Republic, which entered a death spiral six weeks ago and was seized by the Federal Deposit Insurance Corporation early Monday and taken over byJPMorgan Chase, is the third US lender to fail in two months — and the reason has a lot to do with its well-heeled client base.”
“Banks Are Finally Admitting They Have A Problem With Billions Of Dollars In Looming Real-Estate Defaults” (Insider). “The US's four largest banks, Wells Fargo, JPMorgan Chase, Bank of America, and Citibank, together now have $62.9 billion of such loss provisions, according to the debt-tracking firm Trepp's analysis of their recent first-quarter financial statements. That's a $12.6 billion increase in their reserves from six months ago…Some of the uptick is attributable to expected losses connected to commercial real estate.”
“Home Buyers Are Eager But Sellers Are Scarce, Creating ‘Real Gridlock’” (New York Times). “The housing market typically comes to life in spring, when buyers emerge in the warmer weather. This year, the market appears stuck in a deep freeze, and the biggest culprit is a lack of sellers, housing experts say.”
