On May 1st, First Republic Bank became the second-largest bank to fail in US history and was sold to JPMorgan Chase. This marks the third bank to fail in the US since March, and the total assets of these failures have surpassed those of the 2008 bank failures during the Great Recession.
We’ll be referencing this article by Peoples Dispatch.
The failure of First Republic Bank is linked to the Federal Reserve’s decision to raise interest rates in response to inflation, which resulted in businesses closing, banks lending less money, and mass unemployment. While the US Treasury Department claims that the nation’s banking system is “sound and resilient,” these failures demonstrate the fragility of the system.
JPMorgan Chase has now acquired both First Republic Bank and Washington Mutual, which collapsed in 2008, making it even larger and more dominant in the banking industry. However, regulations prohibit JPMorgan Chase from acquiring another deposit-taking institution, making this an exception. The acquisition of First Republic Bank illustrates how moments of crisis under capitalism often result in further monopolization. Despite these bank failures and the impact of rising interest rates on the economy, the US government has chosen not to implement measures such as price caps, higher taxes on the wealthy and corporations, and the nationalization of private institutions such as banks, forcing workers to bear the brunt of the inflationary crisis instead of holding capitalists accountable.