JP Morgan boss Jamie Dimon leads talks to bail out stricken lender First Republic

JP Morgan boss Jamie Dimon led efforts last night to secure a bailout for troubled US regional lender First Republic.

As shares in First Republic plummeted again, the Wall Street veteran held talks with the CEOs of other major banks about how to strengthen battered finances.

JP Morgan was one of 11 US banks to pour a total of £25bn into First Republic late last week in a bid to restore confidence.

But it didn’t have the desired effect, and shares of First Republic fell another 45.7 percent yesterday — bringing its loss to 90 percent this month — as customers pulled tens of billions of dollars from their accounts.

Dimon leads talks on how to increase the bank’s cash reserves. The plan could involve turning some or all of the £25bn deposited by the 11 banks last week into a capital injection.

Customers of San Francisco-based First Republic took out around £57bn in deposits as it became caught up in the panic sparked by the collapse of Silicon Valley Bank (SVB) earlier this month.

The battle to save First Republic comes as Dimon and other bank executives work with U.S. regulators to restore confidence in the financial system as it faces its worst crisis in 15 years.

Three US banks – SVB, Signature Bank and Silvergate – collapsed this month. Over the weekend, New York Community Bank agreed to buy more Signature.

“In less than two weeks, three medium-sized US banks have failed and Credit Suisse has accelerated into a takeover by UBS,” said Ian Stewart, Deloitte’s chief economist in the UK.

These events represent the most challenging moment for the banking system since the early days of the financial crisis in 2008.

“As has often happened before, a combination of rising interest rates and slowing growth is testing the financial system.”