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- Mohamed El-Erian said JPMorgan's takeover of First Republic could lead to "potential collateral damage".
- It's another case of US government institutions settling for a "second best" solution, he wrote in a Bloomberg op-ed.
- El-Erian warned of four unintended consequences from the deal including "a more concentrated banking system" and the risk of deeper credit crunch.
Top economist Mohamed El-Erian warned of further "potential collateral damages" from the failure of First Republic Bank and its subsequent takeover by JPMorgan.
The Wall Street giant agreed on Monday to acquire First Republic, which was shut down by after facing a spiraling deposit run in recent weeks, paying $10.6 billion to the Federal Deposit Insurance Corp. (FDIC) in a deal arranged by regulators.