The Impact of First Republic's Collapse on US Banks.

JPMorgan Chase's acquisition of First Republic, which was seized by the FDIC, includes a payment of $10.6bn in cash, a promise to pay $50bn more plus interest over the next five years, and a credit guarantee for loans JPMorgan is assuming. The deal was structured to raise the sum JPMorgan was willing to pay and reduce the burden on the FDIC. The credit guarantee makes it easier for JPMorgan to meet regulatory capital requirements, and the funding line helps the bank better match assets with liabilities and manage liquidity consumption. The deal leaves JPMorgan strong and minimizes regulatory costs, but shareholders and bondholders of the old bank receive nothing.