Banking Supervisory Authority USA yesterday took control of the bank Bank of the First Republic and automatically sold it JPMorgan Chase. It was a dramatic move to end the banking crisis that has rocked the banking system for the past two months or so.

Since last month and the collapse of two other American banksin alarm to savers and investors, First Republic struggled to survive after seeing its assets lose some of their value due to rising interest rates. interest rates. So the US Deposit Insurance Authority took control and immediately sold it to JPMorgan, securing the announcement of the deal hours before US markets opened. Yesterday morning, US time, 84 First Republic stores opened in eight states as JPMorgan affiliates. JPMorgan “will assume all deposits and substantially all of First Republic’s assets and liabilities,” the Deposit Insurance Authority said in a statement. He estimated that the deposit insurance fund would have to pay out about $13 billion to cover First Republic’s losses, as well as provide $50 billion in funding to JPMorgan.

The acquisition makes JPMorgan, already the largest bank in the US, even bigger and likely to come under close scrutiny from Democrats. The US bank collapsed despite the fact that 11 of the largest US banks received a $30 billion bailout in March, which JPMorgan Chase said will be repaid after the takeover is completed. This $30 billion capital injection then brought some calm back into the market, easing concerns about the banking system but not worrying about the viability of the First Republic.

The Deposit Insurance Fund will have to pay out about $13 billion to cover the losses of the First Republic.

The bank, founded in 1985, was the 14th largest US bank at the beginning of the year. But its shares have lost almost all their value after their continuous sharp decline, which began with the first shocks. Silicon Valley Bank.

Its end came after weeks of efforts by the bank itself and its advisers to either bail it out or find a buyer and prevent a government takeover. But their efforts were in vain, as other banks were unwilling to buy all or part of it without a government guarantee that it would not leave them helpless with billions of dollars in losses. It became clear last week that there was no other option than to take it over from the government after the bank announced that its clients had withdrawn nearly 50% of their deposits.

First Republic will go down in history as the second-largest US bank that collapsed after Washington Mutual, which collapsed during the global financial crisis of 2008. Many industry experts interpret First Republic’s woes as a belated reaction to the turmoil that occurred in March after the collapse of two regional banks , Silicon Valley Bank and Signature Bank, and the resulting fear that other regional banks could fail as the risk of a run on deposits became apparent.

However, investors and sector leaders say they are optimistic that there is no risk that another bank, medium or large, will fail. However, the US financial system has many problems. Recent bank failures and rising interest rates have forced banks to cut back on lending, hindering growth efforts by businesses and households to buy houses and cars. They are thus one of the reasons for the slowdown in the US economy in recent months.