Coincident withthe Swiss Central Bank’s $54 bailout of Credit Suisse, the U.S. Treasury, Federal Reserve and JP Morgan Chase are taking extraordinary steps to try to prevent the $212 billion in asset First Republic Bank from failing.
On March 12, the San Francisco-based First Republic announced it was on life support with “additional borrowing capacity from the Federal Reserve, continued access to funding through the Federal Home Loan Bank, and ability to access additional financing through JP Morgan Chase,” the nation’s largest bank with $3.8 trillion in assets. In instances like this, JP Morgan Chase acts as an unofficial conduit for funds to distressed banks, with some unspoken secret arrangement with the Fed and Treasury that they will backstop the JP Morgan Chase should there be difficulties. First Republic said that it now had access to $70 billion in funds.
