First Republic, whose assets were battered by the rise in interest rates, had struggled to stay alive after two other lenders collapsed last month, spooking depositors and investors.

First Republic was taken over by the Federal Deposit Insurance Corporation and immediately sold to JPMorgan. The deal was announced hours before U.S. markets are set to open, and after a scramble by officials over the weekend.

Later on Monday, 84 First Republic branches in eight states will reopen as JPMorgan branches.

JPMorgan will "assume all of the deposits and substantially all of the assets of First Republic Bank," the F.D.I.C. said in a statement. The regulator estimated that its insurance fund would have to pay out about $13 billion to cover First Republic's losses. JPMorgan also said that the F.D.I.C. would provide it with $50 billion in financing.

Silvergate has served as one of the two main banks for crypto companies, along with New York-based Signature Bank

. Silvergate has just over $11 billion in assets, compared with over $114 billion at Signature. Bankrupt crypto exchange FTX was a major Silvergate customer.

"In light of recent industry and regulatory developments, Silvergate believes that an orderly wind down of Bank operations and a voluntary liquidation of the Bank is the best path forward," the company said in a statement.

All deposits will be fully repaid, according to a liquidation plan shared on Wednesday. The company didn't say how it plans to resolve claims against its business.

Silicon Valley Bank had 17 branches in California and Massachusetts. The main office and all branches of Silicon Valley Bank will reopen on Monday, March 13, 2023. The DINB will maintain Silicon Valley Bank's normal business hours. Banking activities will resume no later than Monday, March 13, including on-line banking and other services. Silicon Valley Bank's official checks will continue to clear. Under the Federal Deposit Insurance Act, the FDIC may create a DINB to ensure that customers have continued access to their insured funds.

As of December 31, 2022, Silicon Valley Bank had approximately $209.0 billion in total assets and about $175.4 billion in total deposits. At the time of closing, the amount of deposits in excess of the insurance limits was undetermined. The amount of uninsured deposits will be determined once the FDIC obtains additional information from the bank and customers.

The rise in interest rates was choking the VC- and startup-heavy bank. It was trying an 11th-hour attempt to sell itself in recent days.

"He's completely lost control of the Italian bond market in two weeks," said Boockvar. "I think he's going to do his best to verbally calm nerves, but as far as legally using his balance sheet to help, I don't see what he can do."

But some traders appear to see the Italian situation as enough of a red flag to slow the Fed, particularly after the U.K. Brexit vote led to a market correction.

"The market is still pricing in a Fed hike for next month. It's already in the cards. Why would the Fed not raise interest rates, given the kind of economic data we expect this week?" said Chandler. "Where I really see this having an effect is on the back end, the September hike."

Robert Sinche, chief global strategist at Amherst Pierpont, does not see enough damage from Italy to slow the Fed.

"I think this will be a lot of noise, but I've seen this movie three or four times before. Italy stays in [the euro zone], and life goes on. There could be a little more uncertainty over the summer. They've realized that, which is why they pushed up the election to late July/early August," he said.

That said, some analysts have been surprised how quickly the bank was able to estimate an implied quantitative cost for what is essentially a qualitative and broad issue at the bank. In light of that, Wells Fargo passing its review on September 30th will not be a precise science.

Furthermore, there is also the question of long term damage and market share losses from the limit on growth and negative press, particularly at a time when rivals are freer to lend and grow than they have been for years. This is highlighted by rival JP Morgan's recent push into new markets -- many where Wells Fargo has a big presence.

Should they fail the review later this year, and the cap on assets remains, then the extent of impact on Wells Fargo will be far more significant.

...

The Senate's plan calls for $473 billion in cuts from Medicare over 10 years and more than $1 trillion from Medicaid, which shouldn't be making anyone happy. However, according to a Congressional Budget Office estimate, the bill will also cut spending by more than $5 trillion over the next 10 years, although details are missing.

...

With the mid-term elections now only a year away, Republicans are clearly desperate. Having failed in their efforts to repeal and replace the Affordable Care Act, aka Obamacare, and with no other legislative accomplishments to speak of, they are understandably worried about losing the majority in the House of Representatives next fall.

...

My point here is that when Republicans were trying to repeal Obamacare, voters made their voices heard, and both attempts failed as a result. This time around, we shouldn't expect the GOP to make the same mistakes they made last time around. In fact, we should expect Republicans to make almost any deal if doing so will make the bill pass.

...

The billion-dollar loss comes from the difference in the FDIC's obligations and what it can expect to collect from the assets. The last time the FDIC paid more than $1 billion to absorb losses was when two banks in Puerto Rico failed in 2010.

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First NBC was founded in 2006 and proclaimed its mission to be helping Louisiana rebuild from Hurricane Katrina. The bank got in trouble in part because it became unusually reliant on projects that revolve around federal tax credits for low-income or less developed areas. The bank would finance projects and get tax credits good in the future. But regulators decided that First NBC was overstating the value of those tax credits, forcing the bank to write down their value. Regulators increased scrutiny and ordered the bank to raise capital, but the bank had to set aside another $86 million in the last three months of 2016 to cover increasing loan losses.

As part of this inevitable outcome, one which presages the company's eventual disintegration and likely liquidation, Bloomberg reports that the non-binding rescue loan with an unnamed counterparty will be secured by a portfolio of mortgage loans originated by Home Trust, the Toronto-based firm said in a statement Wednesday. Home Capital shares dropped by 61% in Toronto to the lowest since 2003, dragging down other home lenders. Equitable Group Inc. fell 17 percent, Street Capital Group Inc. fell 13 percent, while First National Financial Corp. declined 7.6 percent. In short, the Canadian mortgage bubble has finally burst.

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First, the North Carolina commissioner, Ray Grace, issued a cease and desist order against the company after a determination that it "has engaged in, or is engaging in, or is about to engage in, acts of practices constituting violations of state and federal law and applicable regulations."

... On February 28, 2015, Florida, Maryland, Massachusetts, Mississippi, Montana, and Washington conducted a multi-state examination of the company covering operations from January 1, 2013 to the examination date. That examination identified several violations of state and federal law including consumer escrow accounts that could not be reconciled and willful and ongoing unlicensed activity in certain states. The examination also found that the company's financial condition was deteriorating.

The order alleges the company subsequently failed to respond to requests for information on its apparent unlicensed activity and company executives were warned the violations were unacceptable and would not be tolerated. OFC partially addressed these violations after a lapse of two years, but the Commissioner's order states that unlicensed activity is believed to continue in some jurisdictions.

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In December 2016 OFC and state regulators entered into a Memorandum of Understanding (MOU) which required OFC to retain an independent auditing firm to perform a comprehensive audit and reconciliation of all escrow accounts with a report submitted to and approved by the MMC by January 13, 2017.  On that date, the company informed the MMC that the $1.5 billion cost of that audit was beyond its financial capability and asked to sample 457 accounts out of the 2.5 million it had serviced over the initial audit period.  The company has also failed to provide a suitable going-forward business plan to address its financial condition.

The Cease and Desist Order requires OFC to immediately cease acquiring new mortgage servicing rights and acquiring or originating new residential mortgages until it provides a sufficient analysis of its financial condition and provides state regulators with a reconcilement of its escrow accounts showing that consumer funds are appropriately collected, accounted for, and distributed.  OFC has 20 days in which to request a hearing.

Sadly, this is a realistic outcome if you combine five to six percentage points of consolidation, a multiplier of 1.5 (especially as much of the consolidation is offsetting a fall in federal funding) and negative trend growth. There is a real risk that the coming contraction generates further outmigration, undermining the basis for any eventual recovery. Puerto Ricans are not required to stay on on-island. A shrinking population ultimately means a shrinking tax base.

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Basically, Puerto Rico tried to avoid a draconian consolidation after its 2007 slump through running down pension assets (and for a while running up debt) and by taking advantage of Obama era policy changes--but now has run out of rope.