In an effort to rein in a two-month banking crisis that has disrupted the finance world, federal regulators seized control of First Republic Bank today, selling it to JP Morgan Chase.
Robert Hockett, professor of law and public finance at Cornell Law School says, contrary to Wall Street and Washington, this is not the end of the March banking crisis, but rather a continuation of the beginning.
“As all too few of us predicted in early March, the ongoing concentration of U.S. banking into a few one-size-fits-all Wall Street institutions continues apace, with our largest banking conglomerate - JP Morgan Chase - now having purchased yet another large regional bank on the cheap with federal assistance.
“Contrary to cheery Wall Street and Washington predictions made over the weekend, this is not ‘the end of the March banking crisis’ - it is still the beginning, as shuddering regional bank stocks already are showing at the stock exchanges’ opening bells.
“We now have but two choices before us: either we preserve our production-focused regional and sector-specific industrial banking systems by removing Federal Deposit Insurance limits immediately, or we allow financialized Wall Street banks to take all - an outcome that will ultimately necessitate nationalization of the whole sector.”