JPMorgan Chase & Co.’s acquisition of troubled First Republic Bank is a sign of growing consolidation in the U.S. banking landscape, experts told BNN Bloomberg.

Dick Bove, chief financial strategist at Odeon Capital, said the deal is a “grand-slam home run” for JP Morgan, already America’s largest bank, but it’s bad news for smaller lenders in the country.

“It increases the ability of JPMorgan to wipe them out,” Bove said in a television interview on Monday.

“It is very good for JPMorgan, maybe a lot less good for American banking.”

JP Morgan agreed to buy First Republic in a government-led deal for the latest bank to fail in the U.S. since Silicon Valley Bank’s collapse in March, which set off what many have characterized as a crisis in the banking sector.

The U.S. Federal Deposit Insurance Corporation (FDIC) is taking the loss on First Republic’s securities and loans. JP Morgan, meanwhile, is acquiring the bank at its real value and is not honouring First Republic’s debt – something Bove said benefits the larger institution and threatens smaller banks, as it makes “it virtually impossible for them to maintain their ratings” and harder to raise money.

Bove said the latest bank failure is evidence of a “systemic crisis” in the financial system. He expects regulators will face questions about the JP Morgan-First Republic deal and their role in the banking turmoil of the last few months.

Adam Johnson, founder and author at Bullseye Brief, said he sees the JPMorgan development as a sign of consolidation in U.S. banking, as large banks become bigger and more powerful, with the aid of the FDIC in situations like the JPMorgan-First Republic acquisition.

While some U.S. lawmakers have raised concerns about that pattern, Johnson said it reassures him that the recent issues at some regional banks won’t spiral into a full-blown crisis like the 2008 crash.

“When you have banks like that (JPMorgan) at the top of the banking pyramid, that makes me feel more comfortable, not less comfortable, that the banking sector is stronger than ever,” he said.

Johnson said the banks that have failed recently in the U.S. were particularly affected by the heightened interest rate environment due to how they set up their finances. For that reason, he considers it unlikely their issues will spread to other banks, pointing to JPMorgan chief executive Jamie Dimon’s Monday comments that the crisis may be nearing its end.

“In other words, the lenders that were too aggressive have folded, they've been bought, they've been acquired, and now we're getting back to sort of banking as normal, banking as usual, or at least banking as responsible,” he said.