US President Joe Biden addressed the nation on Monday after the FDIC took over First Republic Bank and sold it to JPMorgan Chase.
"All depositors at First Republic Bank are protected. Taxpayers are not in danger. The FDIC did its job and made sure no one was losing their money," he said.
Biden also urged Congress to raise the debt limit and said that defaulting on the national debt should be avoided, which would be disastrous for the economy and the world.
"There can be no question of defaulting on our national debt. America is not a nation in default."
Biden warned that a debt default would raise interest rates, skyrocket mortgage rates and harm millions of homeowners and businesses.
Biden also said he would work with Congress to strengthen bank regulations and prevent future crises.
First Republic Bank was the third-largest bank to fail this year, after Silicon Valley Bank and Signature Bank.
The FDIC estimates that the insurance fund, which consists of fees banks pay the institution to insure deposits, would have to pay about $13 billion to cover First Republic's losses. JPMorgan also said that the FDIC will provide it with $50 billion in financing, and that JPMorgan will pay the FDIC $10.6 billion.
*Not investment advice.
