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 $3.7 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.
Not since then, financial historians said, has the leader of a single company held such sway over the U.S. financial system.
“There has always been this question of who can convince everybody that they have the assets or the cultural authority to stop a bank run,” said Kenneth W. Mack, a professor of law and history at Harvard University. Given JPMorgan’s reputation for risk aversion and Mr. Dimon’s long history atop the bank, “it’s natural that he’s the person who the federal authorities continue to rely on to come to the rescue.”
Mr. Dimon became chief executive in 2006, less than two years after JPMorgan bought the Chicago bank that he’d been running. After the merger, JPMorgan was big: It had more than $1.1 trillion in assets and held about 10 percent of the country’s deposits. It was on its way to becoming an industry powerhouse.
Mr. Dimon had come of age in the industry as a protégé of Sanford Weill, the hard-charging chairman of Citigroup, whose mission was to build the world’s greatest financial supermarket. In the late 1990s, it was Mr. Weill’s ravenous appetite for growth that had prompted Washington to tear down walls that, since the Great Depression, had hemmed in the banking industry and barred commercial lenders from peddling a broad range of financial services.
Mr. Dimon had been running JPMorgan for barely two years when the 2008 financial crisis hit, and it provided him with a once-in-a-generation opportunity to recast JPMorgan — and himself — as industry heroes.
With the entire global banking on the brink, Mr. Dimon became one of a small handful of top executives, along with the men running Bank of America and Wells Fargo, who tried to fashion themselves as rescuers.
Bank of America gobbled up Merrill Lynch and Countrywide. Wells Fargo got Wachovia. Mr. Dimon’s haul: Bear Stearns, then Washington Mutual. Within a few years, there was a key difference between Mr. Dimon and his rivals: Their institutions ran into trouble — first Bank of America, then Wells Fargo — and their leaders stepped aside.
Mr. Dimon is now Wall Street’s longest-serving C.E.O.
JPMorgan kept growing. In recent years, it snapped up dozens of smaller businesses: a student financial aid firm, multiple software companies, even the restaurant review website that owns Zagat.
The swelling size of banks like JPMorgan has troubled some experts, including senior officials in the Biden administration. A small handful of banks have amassed dominant positions in many parts of the country, crowding out community lenders and leaving customers with limited access to banking services.
Yet even when JPMorgan was humbled by occasional scandals — the “London Whale” trading blowup in 2012, in which the bank lost more than $6 billion, was by far the most serious — Mr. Dimon often turned the tables. As regulators moved to punish the bank for misconduct by the companies it had purchased during the crisis, Mr. Dimon insisted to federal officials that he’d been doing them and the country a favor by buying the flailing institutions. Industry observers marveled at Mr. Dimon’s steadfast refusal to apologize.
Somewhere along the way, Mr. Dimon began filling in a missing piece of his public profile: the role of a statesman whose power and prestige transcended the single institution.
That was how the world had viewed J.P. Morgan a century earlier. He had been more than the world’s richest man; he was also the banker with the clearest sense that the interests of Wall Street, Washington and himself were closely entwined, according to David K. Thomson, an associate professor of history at Sacred Heart University. Mr. Morgan, therefore, understood that he had a powerful incentive to solve the industry’s crises whenever possible.
Mr. Dimon set out to show the world that he, too, was more than just a savvy and fabulously wealthy banker.
After JPMorgan was caught illegally foreclosing on the homes of active military service members in 2011, Mr. Dimon co-founded an effort by 11 companies to hire more military veterans, pledging to bring on 100,000 by 2020. After the city of Detroit went bankrupt in 2013, in part because of shenanigans by Wall Street banks, JPMorgan pledged to help reverse the city’s fortunes, and Mr. Dimon personally associated himself with the work.
He began opining on a wide range of policy issues, from education to immigration, in a letter he wrote to shareholders each spring. He became chairman of the Business Roundtable and worked to strengthen the group’s sway over lawmakers. He publicly championed the concept of “stakeholder capitalism,” the idea that doing right by shareholders also involved treating communities, workers and customers better.
During the Obama administration, Mr. Dimon was being touted as a possible public servant. The billionaire investor Warren Buffett suggested in 2012 that President Barack Obama make Mr. Dimon Treasury secretary. In 2016, following rumors that President-elect Donald J. Trump might tap him for that position, Mr. Dimon said that he had let Mr. Trump’s transition team know that he wasn’t interested. A columnist for The New York Post floated his name again in 2020 after President Biden’s election, though Mr. Dimon insisted that he’d “never coveted the job.”
All this talk, though, along with his longevity as a chief executive and JPMorgan’s reputation for stability, rendered Treasury Secretary Janet Yellen’s call to Mr. Dimon to help with First Republic unsurprising when it came.
“It wasn’t clear in 2008 that Jamie Dimon would be that person; it’s what happened since 2008 that’s made him that person,” Mr. Mack said.
Mr. Buffett put it this way in an email to The New York Times on Monday: “Jamie is doing the right thing for the country and the right thing for JPMorgan Chase — exactly what I would have expected him to do.”