Monday, the Federal Deposit Insurance Corporation (FDIC) issued a statement confirming that First Republic Bank had failed.

The investment banking titan JP Morgan will acquire all of First Republic’s deposits and the preponderance of its assets.

First Republic is the third US bank to fail in recent months, sparking concerns of a more widespread banking crisis.

The lender headquartered in San Francisco disclosed that consumers had withdrawn $100 billion (£79.6 billion) in deposits during the month of March, causing its shares to decline by more than 75% last week.

It follows the March failure of Silicon Valley Bank (SVB) and that of another US lender, Signature Bank.

AFP said that US officials contacted six institutions to devise a First Republic rescue plan.

Jamie Dimon, chief executive officer of JP Morgan Chase, stated that the government “invited” the banking behemoth and others to “step up,” which they did.

He added that the acquisition would “modestly benefit” the company and would be “complementary” to the current operation.

First Republic will sell JP Morgan $173 billion in loans, $30 billion in securities, and $92 billion in deposits.

As part of the agreement, the FDIC and JP Morgan will share loan losses. It estimates the purchase would cost its insurance fund $13 billion.

The 84 offices of the failed bank in eight states will reopen on Monday as branches of JPMorgan Chase Bank after regulators seized control and promptly sold them to the Wall Street institution.

In recent months, the Federal Reserve, the US central bank, was compelled to take emergency measures to stabilize financial markets due to a flight of deposits from certain lenders.

A coalition of America’s major banks injected $30 billion into the First Republic in March, but it failed.

First Republic, founded in 1985, is a mid-sized US lender comparable to Silicon Valley Bank. After a weekend of discussions, it secured the finances of affluent clients.

To avert a bank run after Silicon Valley Bank and Signature collapsed, the FDIC guaranteed all deposits.

In March, Credit Suisse was acquired by rival UBS in Europe in a transaction orchestrated by Swiss authorities.

Some lenders were pressured as central banks aggressively raised interest rates to slow inflation.

Increased interest rates have diminished the value of banks’ vast bond portfolios acquired when rates were lower.

However, the current situation does not appear to be a repeat of the 2008 financial crisis, as there is no system-wide problem. During the 2008 financial crisis, banks around the world were abruptly exposed to bad investments in the US housing market.

This resulted in massive government bailouts and a global economic downturn.