Current:Home > MarketsHas JPMorgan Chase grown too large? A former White House economic adviser weighs in-Angel Dreamer Wealth Society D1 Reviews & Insights
Has JPMorgan Chase grown too large? A former White House economic adviser weighs in
View Date:2024-12-23 18:52:48
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! (8946)
Related
- Krispy Kreme is giving free dozens to early customers on World Kindness Day
- Going, Going … Gone: Greenland’s Melting Ice Sheet Passed a Point of No Return in the Early 2000s
- UN Launches Climate Financing Group to Disburse Billions to World’s Poor
- After the Hurricane, Solar Kept Florida Homes and a City’s Traffic Lights Running
- Homes of Patrick Mahomes, Travis Kelce burglarized, per reports
- Cows Get Hot, Too: A New Way to Cool Dairy Cattle in California’s Increasing Heat
- Why TikTokers Francesca Farago and Jesse Sullivan Want to Be Trailblazers in the LGBTQ+ Community
- Cows Get Hot, Too: A New Way to Cool Dairy Cattle in California’s Increasing Heat
- Wall Street makes wagers on the likely winners and losers in a second Trump term
- Rebuilding After the Hurricanes: These Solar Homes Use Almost No Energy
Ranking
- In an AP interview, the next Los Angeles DA says he’ll go after low-level nonviolent crimes
- BP’s Incoming Boss Ready to Scale Down Gulf Clean-up Operation
- The 26 Best Deals From the Nordstrom Half Yearly Sale: 60% Off Coach, Good American, SKIMS, and More
- Congress Passed a Bipartisan Conservation Law. Then the Trump Administration Got in its Way
- Disney Store's Black Friday Sale Just Started: Save an Extra 20% When You Shop Early
- Ryan Mallett, former NFL quarterback, dies in apparent drowning at age 35
- Heat blamed for more than a dozen deaths in Texas, Louisiana. Here's how to stay safe.
- 2 more Connecticut officers fired after man became paralyzed in police van
Recommendation
-
Golden Bachelorette: Joan Vassos Gets Engaged During Season Finale
-
Ryan Mallett, former NFL quarterback, dies in apparent drowning at age 35
-
Get These $118 Lululemon Flared Pants for $58, a $54 Tank Top for $19, $138 Dress for $54, and More
-
DoorDash says it will give drivers the option to earn a minimum hourly wage
-
Mariah Carey's Amazon Holiday Merch Is All I Want for Christmas—and It's Selling Out Fast!
-
Arctic Drilling Ruling Brings Hope to Native Villages, Subsistence Hunters
-
Pride Accessories for Celebrating Every Day: Rainbow Jewelry, Striped Socks, and So Much More
-
Madonna hospitalized with serious bacterial infection, manager says