Matt Levine, Columnist

JPMorgan Got a Deal on First Republic

Also US government CDS and TerraUSD II.

May 1, 2023 at 6:35 PM UTC

Matt Levine is a Bloomberg Opinion columnist. A former investment banker at Goldman Sachs, he was a mergers and acquisitions lawyer at Wachtell, Lipton, Rosen & Katz; a clerk for the U.S. Court of Appeals for the 3rd Circuit; and an editor of Dealbreaker.

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Programming note: Money Stuff will be off tomorrow, back on Wednesday.

Let’s start with some bank accounting. You’ve got a bank, its assets are $100 of loans, and its liabilities are $90 of deposits. Shareholders’ equity (assets minus liabilities) is $10, for a capital ratio (equity divided by assets) of 10%. Pretty normal stuff.