When the financial system is consumed by uncertainty or fear, it is just about impossible to get to a good deal. That another bank was willing and able to buy the troubled First Republic is something of a relief
knights on horseback,” Logan Roy, the former boss of WayStar Royco, a media conglomerate, and lead character of “Succession”, a television drama, tells his son Kendall. He is warning his offspring that life is not about heroes. “It’s a number on a piece of paper. It’s a fight for a knife in the mud.”
A healthy financial system, then, is rife with deals. A sickly one is not. When the system is consumed by uncertainty or fear, it is just about impossible to get to a good deal. That another bank was willing and able to The funding line also looks a little needless. JPMorgan has plenty of excess funding. It has more than $500bn in cash parked in deposits with the Federal Reserve and other banks. But to help fund the $180bn or so in assets JPMorgan is acquiring it will take on $90bn in new deposits, $30bn in loans from the Federal Home Loan Bank, plus the $50bn loan from the$60.6bn, rather than $10.6bn, in cash now and forgo the loan. The problem is that banks also have to meet liquidity-coverage ratios .
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