BUSINESS
How JPMorgan’s Dimon won the First Republic deal
JPMorgan Chase & Co (JPM.N) backed First Republic Bank to the tune of $10 billion, according to two sources, on March 12 as major U.S. banks struggled in the wake of a confidence crisis.
Even with the JPMorgan facility, depositors nevertheless started leaving the bank in droves. However, this was only the beginning of a chain of events – some of which are reported here for the first time – that would ultimately place JPMorgan and its CEO, Jamie Dimon, at the center of one of the most extraordinary bank rescues in recent U.S. history.
After weeks of unsuccessful rescue attempts and botched conversations with some of the most influential Wall Street CEOs and U.S. authorities, JPMorgan purchased First Republic on Monday in a government auction. Two people familiar with the matter say that negotiations for the deal were very close to completion. One of the sources claims that four bidders, including JPMorgan, advanced to the final round of the auction on Sunday night.
Even though the deadline for final offers had been set for several hours earlier, JPMorgan did not find out it had won until approximately 1.15 a.m. in New York. One of the sources claimed that late that night, as Dimon and the other executives waited for the outcome of their proposal, they assumed they had lost because of the FDIC’s quiet.
Announcing the final agreement at 3:30 in the morning solidified Dimon’s position as a top power broker on Wall Street.
Nonetheless, the deal sparked new concerns about the risks of too-big-to-fail banks, the effectiveness of regulatory oversight of the banking industry, and the Biden administration’s determination to prevent corporations from gaining too much power through deals.
Piper Sandler analysts said JPMorgan benefited more from the purchase than just financially, calling the bank “the go-to industry leader in times of turmoil.”
“Right now, our only real cause for concern is the unknown. They stated, “At a time when ‘too-big-to-fail’ is still a political problem, JPMorgan Chase has managed to make itself an even more powerful participant.
Dimon refuted claims that his bank is becoming too large.
The banker added on a conference call after the deal, “We have capabilities to serve our clients, who can be cities, schools, hospitals, governments; we bank the IMF, the World Bank.” “And if you think the United States shouldn’t have it, please feel free to contact me.”
James “Jim” Herbert, the son of an Ohio community banker, started First Republic in 1985. Merrill Lynch acquired the bank in 2007, just before the global financial meltdown. In 2010, after Bank of America Corp (BAC.N) acquired Merrill Lynch, the company re-entered the public markets.
To entice wealthy customers, First Republic offered them discounted mortgage and loan rates. Its dependence on the wealthy made it more susceptible to risk, as seen by the high proportion of uninsured deposits.
In early March, First Republic became a target as investors and depositors fled Silicon Valley Bank in search of perceived safety at other financial institutions. In the first quarter alone, it lost over $100 billion in capital, forcing it to scramble for new investors.
First Republic announced that it had taken additional steps to access a total of $70 billion in money, including from JPMorgan, by the weekend of March 12, when regulators seized Silicon Valley Bank and Signature Bank and announced a series of emergency measures to shore up trust in the system.
The stock price of First Republic did not stabilize as a result of the reassurance, and it dropped again the next day.
It is unclear when JPMorgan’s involvement with First Republic expanded beyond that of an advisor assisting the bank strengthen its finances, but Reuters was able to establish that it did. It was appealing to JPMorgan because of the potential boost to its private banking business from the lender’s client list of high-net-worth individuals.
However, conventional wisdom at the time held that regulators would not approve of JPMorgan’s purchase of another bank. Federal law prohibits a huge bank like JPMorgan from making an acquisition that would bring it above the 10% threshold of total bank deposits in the country. The rule can be bent to allow acquisitions of failing banks.
According to a person with knowledge of the situation, JPMorgan began an internal process to explore potential outcomes for First Republic, one of which was an acquisition. According to the insider, the deal was given the codename “Forest” internally.
Turkish President Tayyip Erdogan voiced his displeasure with the United Nations’ use of “LGBT colors” to promote this week’s Sustainable Development Goals.
On Thursday, Turkish media claimed that Erdogan wanted to discuss the issue with U.N. Secretary-General Antonio Guterres. Erdogan and the Islamist-rooted AK Party, which he leads, have tightened their stance on LGBTQ rights in Turkey.
Erdogan said, “One of the issues that bothers me the most… is that when entering the United Nations General Assembly, you see the LGBT colors on steps and other places,” by the Turkish broadcasting company Haberturk and others.
To what extent does the global LGBT community currently exist? Erdogan, who has repeatedly called members of the LGBTQ community “deviants” and particularly sharpened his rhetoric during this year’s election campaign, said that whoever is against the LGBT community has just as much right to be there.
Some U.N. diplomats, however, have suggested that Erdogan may have confused the 17 colors used to decorate the U.N. headquarters for a summit held earlier this week with the rainbow Pride colors associated with LGBTQ rights.
Guterres is an outspoken advocate for LGBTQ rights, yet the United Nations building does not include the rainbow Pride flag.
When asked for a reaction to Erdogan’s comments, a representative for Guterres did not provide any right away.
The 17 Sustainable Development Goals, with a 2030 deadline, are a global “to-do” list with goals like eradicating extreme poverty and hunger, addressing inequality and climate change, and advancing gender equality.
Although
Vice President Joe Biden informed Ukrainian President Volodymyr Zelenskiy that despite opposition from some Republican lawmakers to giving billions more in aid, the United States will continue its strong support for his struggle to repel Russian invaders.
The Ukrainian leader, Zelenskiy, met with Vice President Biden in the White House’s East Room for a war council as part of a flurry of public appearances he made to rally American support for a conflict that has been ongoing since February 2022.
Biden told Zelenskiy, “Mr. President, we’re with you, we’re staying with you,” before shaking his hand at the end of their two-hour meeting.
Zelenskiy thanked Biden for a new $325 million military aid package, stating, “it has exactly what our soldiers need now.”
He said he and Biden had settled on concrete measures to increase Ukrainian grain exports despite a Russian blockade and tensions with neighboring Poland. He was vague on how to proceed.
House Republican conservatives are blocking Vice President Biden’s request for an additional $24 million in Ukraine financing to pay for the country’s defense and humanitarian aid through the end of the year.
When asked how to win over skeptics, Vice President Biden stated that they must first win over the United States Congress.
I trust the Congress of the United States to make the right decision. There’s no way out,” he concluded.
The resistance was encapsulated by Senator Rand Paul of the Republican Party, a vocal opponent of foreign aid. When asked about the war’s prospects, he told Fox Business News that Ukraine’s “corrupt regime” makes peace unlikely.
Biden announced that the first American Abrams tanks would be sent to Ukraine the next week.
Besides backing changes that would combat corruption, the United States is “committed to helping Ukraine defend itself now,” as Vice President Joe Biden put it.
FLYING DEFENSE
Vice President Biden announced that the United States would ship another Hawk air defense battery to Ukraine, this one manufactured by Raytheon. According to a U.S. official, the equipment will arrive shortly in Ukraine.
Zelenskiy came to Washington on a blitz throughout the city after seeking international support at the United Nations on Wednesday. He spoke with military chiefs at the Pentagon, toured the U.S. Capitol, and gave a talk at the National Archives museum later that day.
During his meeting with Zelenskiy earlier in the day, Vice President Biden praised the bravery of the Ukrainian people and announced a fresh $325 million military aid package for Ukraine.
At the outset of their conversation, Biden remarked, “Together with our partners and allies, the American people are determined to see to it to that (we) do all that we can to ensure that the world stands with you.”
Ukrainian Foreign Minister Pavlo Zelenskiy thanked the United States for helping “to combat Russian terror” and promised to talk to Vice President Joe Biden about the country’s defense needs, emphasizing air defense.
“Today I’m in Washington to strengthen our ability to defend Ukrainian children, our families, our homes, freedom, and democracy around the world,” he added.
Although Vice President Biden and most congressional leaders still support aid to Ukraine and Biden’s Democratic Party controls the Senate, Zelenskiy encountered a rougher crowd than on his previous visit nine months ago.
Senator Chris Murphy wrote on platform X that Zelenskiy, dressed in military green to signify his rank as a combat leader, informed the entire U.S. Senate in the historic Old Senate Chamber and received many standing ovations.
Senators were briefed behind closed doors by Zelenskiy, who reportedly informed them that military aid was critical to Ukraine’s war effort. Majority Leader Chuck Schumer said this in the Senate chamber after the session.
If we don’t get the aid, we’ll lose the fight, Zelenskiy was reported as saying by Schumer.
After the fact, Zelenskiy said that his interactions with parliamentarians were open and fruitful.
Zelenskiy spoke with U.S. Defense Secretary Lloyd Austin and other high-ranking officials at the Pentagon. He and his wife left bouquets at the Pentagon’s memorial for the victims of the September 11, 2001 attacks.
Washington plans to enhance Ukraine’s long-term defense capabilities by hosting a meeting for the U.S. defense industry, Ukrainian business executives, and government officials to explore collaborative ventures and co-production this fall.
According to the White House, Zelenskiy discussed his plans to combat corruption with Vice President Biden during their discussion. Biden stressed the need for robust anti-corruption institutions in Ukraine.
In front of a case containing the United States Constitution, Zelenskiy delivered his address of gratitude to the American people, declaring, “there is not a soul in Ukraine that does not feel gratitude to you, America.”
Doctors who cared for Ukrainian soldiers and civilians received prizes, and Zelenskiy and his wife recognized those who helped raise money for ambulances and other medical supplies.
An increasing number of Republicans have questioned the billions of dollars Washington has supplied Kyiv for military, economic, and humanitarian needs as Ukraine’s counteroffensive goes on and Congress prepares a fierce battle over spending ahead of a possible government shutdown.
Since Russia’s invasion in February 2022, the United States has provided about $113 billion in security and humanitarian aid to support Zelenskiy’s government.
According to a story in the Financial Times on Thursday, U.S. Vice President Joe Biden and other world leaders voiced their worry to Indian Prime Minister Narendra Modi during this month’s G20 conference about allegations that New Delhi was complicit in the assassination of a Sikh separatist leader in Canada.
The newspaper reported, citing three people with knowledge of the summit, that several members of the Five Eyes—the United States, the United Kingdom, Canada, Australia, and New Zealand—brought up the June killing in British Columbia of Hardeep Singh Nijjar, a Sikh separatist leader, with Modi.
A call for comment from the White House on the FT article initially went unanswered.
The event occurred in India several days before Canadian Prime Minister Justin Trudeau made his accusations public earlier this week in a speech to parliament.
Canada reportedly persuaded its allies to bring up the issue with Modi during the G20 summit, and the leaders intervened.
U.S. national security adviser Jake Sullivan said on Thursday that Washington is not granting India a “special exemption” in the case despite Ottawa’s accusations about the murder of the Sikh separatist leader in Canada and that the U.S. is in contact with Indians at high levels.
India has deemed Canada’s accusations to be “absurd” and has rejected them. The current crisis has further strained relations between Canada and India. On Thursday, India ordered Canada to downsize its diplomatic presence and halted issuing new visas to Canadian citizens.
As a longtime partner and ally, Canada has put several Western countries in an awkward position as they strive to strengthen ties with New Delhi to offset China’s dominance in the Asia Pacific area.
Despair in Gaza as fighting intensifies despite Israel’s promise to scale back the war.
The Maldives upgrades ties with China amid pivot from India.
Ecuador’s president says the country is at war as gangs hold prison staff hostage.
Despair in Gaza as fighting intensifies despite Israel’s promise to scale back the war.
The Maldives upgrades ties with China amid pivot from India.
