First Republic Bank was seized by federal regulators on Monday, and its operations were sold to JPMorgan Chase, making it the fourth bank failure this year.
JPMorgan CEO Jamie Dimon said after the deal was announced that “this part of the crisis is over.” But not everyone agrees. Dick Bove, Odeon Capital Group Financial Strategist, told Yahoo Finance he sees a risk of more bank failures.
Bove says that those who benefited from Silicon Valley Bank and First Republic’s failures will be looking for a new target to bring down.
“The antelopes are being prowled by the lions here and the lions are going to find other ones to attack and bring down,” he told Yahoo Finance.
Bove explains some criteria a “lion” may be watching for in a new target, including large portfolio of fixed-rate mortgages, a lot of commercial real estate, and a gap between the bank’s real values and published values.
Those are among the qualities that could put a regional bank on the chopping block, he said.
By Seana Smith / Yahoo Finance