Rescue plan: A First Republic Bank branch in San Francisco. JPMorgan has the advantage of what chief executive officer Jamie Dimon calls its fortress balance sheet heading into the government-led attempt to sell First Republic. — Reuters
NEW YORK: One question looming over First Republic Bank’s emergency auction this weekend is whether giant bidder JPMorgan Chase & Co would become a rare exception to rules forbidding banks that hold more than 10% of US deposits from buying competitors.
An answer could come fast.
Behind the scenes, the Office of the Comptroller of the Currency (OCC) is standing by to quickly vet a deal and render a verdict if the Federal Deposit Insurance Corp (FDIC) deems JPMorgan’s offer attractive and seeks approval, according to people with knowledge of the matter.
The OCC is one of JPMorgan’s primary regulators.
The United States has rules to prevent banks from gaining too much market share through acquisitions – a concern that mounted in the wake of the 2008 financial crisis.
But the rules allow exceptions under a few circumstances, including taking over banks that have failed or are in danger of failing.
JPMorgan, the nation’s largest bank, has the advantage of what chief executive officer Jamie Dimon calls its fortress balance sheet heading into the government-led attempt to sell First Republic.
FDIC officials spent Sunday afternoon weighing options after a deadline passed for offers and they’re widely expected to announce their decision later in the evening.
Representatives for the OCC and FDIC declined to comment. — Bloomberg
