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- JPMorgan Chase Has Lost a Quarter Trillion Dollars in Deposits in Last 7 Quarters – Fortress Balance Sheet or Leaky Sieve?
JPMorgan Chase Has Lost a Quarter Trillion Dollars in Deposits in Last 7 Quarters – Fortress Balance Sheet or Leaky Sieve?
by Pam Martens and Russ Martens Wall Street on Parade
On May 1, the Federal Deposit Insurance Corporation announced that First Republic Bank had failed and that it was being sold to JPMorgan Chase. At the time, JPMorgan Chase was already the largest and riskiest bank in the United States. The sweetheart deal the bank got from the FDIC to take over First Republic included the FDIC eating 80 percent of any losses on single-family residential mortgages for 7 years and 80 percent of any losses on commercial loans, including commercial real estate, for five years. The FDIC also provided JPMorgan Chase with a $50 billion, five-year fixed-rate loan at an undisclosed interest rate.
According to the filing that JPMorgan Chase made with the Securities and Exchange Commission last Friday, the deal also gave JPMorgan Chase something that it desperately needed: deposits. According to the 8-K filing that JPMorgan Chase made with the SEC on October 13, the acquisition of First Republic Bank added $47.2 billion to its deposit base in the second quarter and $66.7 billion in deposits in the third quarter.