The bank crisis is not over

The U.S. bank turmoil is not over. First Republic just became the third major bank to fail this year, requiring a government takeover. Its stock was trading at less than $4 a share on Friday, a cliff-dive from nearly $150 in February, as depositors and investors fled the bank. This is a slow-moving crisis. There will almost certainly be more fallout to come.

At least stronger banks swooped in over the weekend to buy First Republic. JPMorgan Chase emerged as the winner in a bidding war that reportedly had multiple contenders. This means the nation’s biggest bank is getting even larger, helping make it not merely too big to fail but too enormous to fail. Yet the deal was about as good as could be hoped for. The upside is that the Federal Deposit Insurance Corp. did not have to bail out uninsured depositors, though some FDIC money — about $13 billion, according to an initial estimate — was needed to sweeten the transaction. In total, the FDIC has shelled out more than $35 billion so far for these bank rescues. It’s yet another reminder that preventing reckless banking before disaster strikes is better than cleaning up a mess after the fact.