In the latest banking collapse, US financial authorities have taken possession of California's troubled First Republic Bank, which will be acquired by JP Morgan Chase. 

First Republic, the second-largest bank in terms of assets to fail in the United States, has been in freefall since revealing last week that it lost more than $100 billion in deposits in the first quarter, leading its shares to tumble. 

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The San Francisco-based institution was under intense pressure following the March bankruptcy of smaller banks Silicon Valley Bank and Signature Bank, which triggered worries of contagion and shook financial markets. 
 
Officials have been working feverishly to devise a rescue plan and according to a person familiar with the situation, the US Treasury and the Federal Deposit Insurance Corporation (FDIC), which is in charge of insuring bank deposits, approached six banks last week to evaluate their interest in purchasing First Republic's assets. 
 
As part of the agreement reached early Monday, the California regulator nominated the FDIC as receiver of First Republic, which will be sold to JPMorgan Chase immediately. 
 
According to the FDIC, the 84 First Republic offices in eight states will reopen as JPMorgan Chase Bank branches on Monday. 

In a statement, FDIC divulged that "to protect depositors, the FDIC is entering into a purchase and assumption agreement with JPMorgan Chase Bank, National Association, Columbus, Ohio, to assume all of the deposits and substantially all of the assets of First Republic Bank."

The federal regulator calculated that covering First Republic's losses would cost around $13 billion.  
 
The government's acquisition and sale of the bank comes two months after the fall of Silicon Valley Bank, which triggered a chain reaction as worried investors sought evidence of weakness in the larger banking system in the United States and Europe.  

Another US smaller bank fell in the aftermath of SVB's failure, while Credit Suisse became the most visible victim a few days later when authorities forced it to combine with its hated competitor, UBS. 
 
Regulators on both sides of the Atlantic acted quickly to halt the outflow of bank deposits by worried clients.  
 
In March, former Lehman Brothers executive Lawrence McDonald revealed that 50 more US bank collapses could be underway if the US government does not address structural issues.