Current:Home > MyHas JPMorgan Chase grown too large? A former White House economic adviser weighs in-DB Wealth Institute B2 Expert Reviews
Has JPMorgan Chase grown too large? A former White House economic adviser weighs in
View Date:2024-12-23 19:39:07
The Federal Deposit Insurance Corp. (FDIC) says the government might want to reconsider the size of the bank accounts it insures. Accounts are currently insured up to $250,000.
The FDIC suggests a larger limit for certain business accounts might have advantages. The recommendation comes after First Republic Bank collapsed this weekend. The bank had a large share of uninsured deposits, which can worsen bank runs. All the bank's deposits, and most of its assets, were sold to JPMorgan Chase. This transaction required a regulatory waiver as JPMorgan Chase already controls more than 10% of all U.S. insured deposits, a limit set by law for any bank merger.
NPR's Leila Fadel talks to Tomas Philipson, former acting chairman of the White House Council of Economic Advisers, about the risks of JPMorgan Chase becoming even bigger after it took over First Republic Bank.
The interview has been condensed and edited for clarity and length.
Interview highlights
On the regulations to stop big banks from growing too big
I think the problem is that we are getting these too big to fail policies are essentially increasing concentration in the banking sector. And that's what people worry about, because that ultimately leads to lower deposit rates and higher interest rates on loans, etc.
I think FDIC, when they get into a situation when they're bailing out a bank like First Republic, they're looking at their costs a century in the future and they try to minimize those. So, it's an additional bias that they have for big players. JPMorgan is by far the largest bank in the country. It's 2.4 trillion in deposits and this is just a 3% add to their deposits of taking on First Republic.
On what it means for consumers when a bank gets this large
In any industry, when you have a lot of concentration, you have less price competition. Less price competition in the banking sector means lower deposit rates for deposits you make to them and higher rates on the interest rates that they lend out at.
On how to stop banks from failing
You can't have a fail-free banking system that's not good for competition. So I think, you know, the poor people in, you know, in the economy are protected by the FDIC. If you have less than a quarter million in deposits or cash at a bank with which, you know, covers a large share of the population, you are protected by your deposits being insured by the Federal Deposit Insurance Corporation. So the question is, are you going to have a system where the rich people are also covered by regulation.
Jan Johnson contributed editing.
veryGood! (63325)
Related
- Miami Marlins hiring Los Angeles Dodgers first base coach Clayton McCullough as manager
- Georgia court rejects counting presidential votes for Cornel West and Claudia De la Cruz
- Judge orders a stop to referendum in Georgia slave descendants’ zoning battle with county officials
- Americans are more likely to see Harris’ gender as a hurdle than they were for Clinton: AP-NORC poll
- Are Dancing with the Stars’ Jenn Tran and Sasha Farber Living Together? She Says…
- Ryan Reynolds' Deadpool mocks Marvel movies in exclusive deleted scene
- Malik Nabers is carrying Giants with his record rookie pace, and bigger spotlight awaits
- Halloween superfans see the culture catching up to them. (A 12-foot skeleton helped)
- Stock market today: Asian stocks decline as China stimulus plan disappoints markets
- Federal lawsuit challenging mask ban in suburban New York county dismissed
Ranking
- Roster limits in college small sports put athletes on chopping block while coaches look for answers
- Sen. Raphael Warnock is working on children’s book inspired by the story of Jesus feeding the 5,000
- US lawmakers’ concerns about mail ballots are fueled by other issues with mail service
- These are the top 5 states with the worst-behaved drivers: Ohio? Texas? You're good.
- The Bachelorette's Desiree Hartsock Gives Birth, Welcomes Baby No. 3 With Chris Siegfried
- Digging Deep to Understand Rural Opposition to Solar Power
- 10 homes have collapsed into the Carolina surf. Their destruction was decades in the making
- Coach named nearly 400 times in women's soccer abuse report no longer in SafeSport database
Recommendation
-
Will Trump curb transgender rights? After election, community prepares for worst
-
Brian Kelly offers idea for clearing up playoff bubble, but will CFP committee listen?
-
Horoscopes Today, September 25, 2024
-
Northern lights forecast: Aurora borealis may appear in multiple US states, NOAA says
-
Taking stock of bonds: Does the 60/40 rule still have a role in retirement savings?
-
Vanessa Williams talks 'Survivor,' Miss America controversy and working with Elton John
-
Federal lawsuit challenging mask ban in suburban New York county dismissed
-
'Tremendous smell': Dispatch logs detail chaotic scene at Ohio railcar chemical leak