(Adds quotes)
WASHINGTON, May 1 (Reuters) - The U.S. Treasury
Department is encouraged that First Republic Bank was
resolved with the least cost to the Deposit Insurance Fund, and
believes the U.S. banking system remains sound and resilient, a
Treasury spokesperson said early Monday.
U.S. regulators on Monday seized First Republic, the third
major U.S. institution to fail in two months, with JPMorgan
Chase & Co agreeing to take $173 billion of the bank's
loans, $30 billion of securities and $92 billion of deposits.
"Treasury is encouraged that this institution was resolved
with the least cost to the Deposit Insurance Fund, and in a
manner that protected all depositors," the spokesperson said.
"The banking system remains sound and resilient, and
Americans should feel confident in the safety of their deposits
and the ability of the banking system to fulfill its essential
function of providing credit to businesses and families."
San Francisco-based First Republic came under intense
pressure after disclosing last week that it had suffered more
than $100 billion in outflows in the first quarter and was
exploring options.
Treasury had no immediate comment why regulators accepted
the offer from the banking giant JPMorgan, and not those of PNC
Financial Services Group , and Citizens Financial Group
Inc , which also submitted final bids on Sunday,
according to sources familiar with the matter.
The California Department of Financial Protection and
Innovation said it had taken possession of First Republic and
the Federal Deposit Insurance Corporation (FDIC) would act as
its receiver. The FDIC estimated in a statement that the cost to
the Deposit Insurance Fund would be about $13 billion.
In recent years, U.S. regulators have been slow to approve
large bank deals. The Biden administration has also cracked down
on anti-competitive practices.
(Reporting by Andrea Shalal, editing by Ed Osmond and Louise
Heavens)