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First Republic Bank became the fourth regional lender to go under in less than two months, resulting in JPMorgan Chase & Co. purchasing the bank in a government-led deal. Policymakers and many market commentators believe the worst of the banking crisis has past, with former Treasury Secretary Larry Summers stating he is more worried about the U.S. federal debt limit. Lawmakers in Washington have yet to come to an agreement to raise the debt ceiling, which brings the risk of government default on liabilities. Current Treasury Secretary Janet Yellen warned the treasury will have exhausted accounting maneuvers to avoid a default by the start of June. So far, there have been no compromises in what is sure to be a partisan showdown. Any failure to get a deal done will bring calamity to financial markets.
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