(Bloomberg) -- So, is it finally over now?

The turmoil that ripped through the banking industry for weeks seemed quelled, at least temporarily, by the pre-dawn announcement that JPMorgan Chase & Co., the biggest and arguably strongest US lender, is taking over First Republic Bank. If you ask JPMorgan Chief Executive Officer Jamie Dimon, the crisis is pretty much over.

“No crystal ball is perfect, but yes, I think the banking system is very stable,” Dimon responded during a Monday conference call about the deal, which closes out the second-largest bank failure in US history.

With regional bank stock indexes sliding later in the day, some industry stalwarts weren’t sounding the all-clear yet on concern that more distressed lenders could still emerge.

“This is another one-off solution to the liquidity crisis; we worry the market will find another target for funding concerns,” James Fotheringham, an analyst at BMO Capital Markets told clients in a morning note. Congressional action would stabilize system-wide liquidity, “but Congress still appears unwilling to act, despite the reality of another bank failure.”

Some were already finding fault after picking through the terms of the deal, which included $50 billion of financing for JPMorgan, a loss-sharing agreement with the Federal Deposit Insurance Corp. and a $13 billion hit to the agency’s insurance fund.

Senate Democrat Elizabeth Warren of Massachusetts, a well-known advocate for additional banking regulation, issued a statement against America’s big banks getting even bigger. South Carolina’s Tim Scott, the highest-ranking Republican on the Senate Banking Committee, took a more positive view, calling the banking system “strong and resilient,” in a statement. “I’m glad the FDIC heeded my concerns and secured a private-market solution for First Republic.”

Too Fast

That’s not the end of the debate, with lawmakers, regulators and analysts discussing how much of the crisis was due to lax supervision and whether it needs to be tightened, and whether more banks will feel pressure from rising interest rates and their underwater loan values.

In likening First Republic to another recently failed institution Silicon Valley Bank, Janney Montgomery Scott’s Timothy Coffey said the banks’ “cardinal sin” was growing too fast when rates were near zero.

“We would love to say out of the thousands of banks in the US, they were the only two institutions to do that. There were likely others,” Coffey said. “However, it is a very limited set of institutions as the vast majority of banks passed on picking up pennies in front of a steamroller.” Webush’s David Chiaverini sounded a similar note, calling First Republic an “idiosyncratic situation” that won’t lead to bank contagion.

Others sent up a more distinct distress flare. Robert Hockett, a professor of law who focuses on finance at Cornell Law School, called it “not the end of the March banking crisis, but rather a continuation of the beginning.”

“We now have but two choices before us: either we preserve our production-focused regional and sector-specific industrial banking systems by removing Federal Deposit Insurance limits immediately, or we allow financialized Wall Street banks to take all — an outcome that will ultimately necessitate nationalization of the whole sector,” he said in a Monday morning note.

Concern was reflected in the KBW index of regional banks, which fell as much as 2.9% in New York, with at least two members finishing the day down in double digits. It didn’t help that trading in First Republic’s common and preferred shares was halted, leaving investors on the brink of a wipeout, and its unsecured bonds were quoted at less than three cents on the dollar.

Dimon sees it otherwise, calling this part of the crisis “over” during the conference call. Other problems may persist if interest rates continue to rise, he said, “but for now, everyone should just take a deep breath.”

--With assistance from Max Reyes and Ben Bain.

(Updates shares in the second to last paragraph)

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