It was well before dawn on Monday when federal regulators notified JPMorgan Chase executives that they had beaten out three smaller rivals in their bid to buy the doomed First Republic Bank.
By the time the sun rose, JPMorgan’s longtime chief executive, Jamie Dimon, was once again illuminated as the industry’s savior — and the architect of yet another government-brokered deal to help his gargantuan institution grow even larger.
First Republic was the third institution that Mr. Dimon had agreed to buy in a federally backed transaction, following its takeovers of Bear Stearns and Washington Mutual during the 2008 financial crisis. All three deals have helped defuse panics, but they have also benefited JPMorgan, which, with $2.6 trillion in assets and 14 percent of all deposits in the United States, enjoys unparalleled reach inside the world’s largest economy.
JPMorgan’s agreement to buy First Republic is expected to boost the bank’s profits by $500 million this year and will give it access to a stable of wealthy clients.
Yet the deal, coming at a time when politicians from both parties have grown increasingly wary of corporate power, is likely to raise more questions about whether banks like JPMorgan have grown so big that they stifle competition and threaten the financial system.
“First Republic Bank’s sale to the biggest bank in the country only makes our banking system’s ‘too big to fail’ problem even worse,” said Senator Elizabeth Warren, Democrat of Massachusetts.
The transaction adds to Mr. Dimon’s legacy; it has become easy to draw comparisons between him and the man for whom his bank is named. Back in 1907, John Pierpont Morgan Sr. famously locked his Wall Street peers inside his study and refused to let them out until they agreed to join him in bailing out the panic-stricken financial system.
