The leaders of Wall Street y US authorities who are discussing an intervention in First Republic Bank They are exploring the possibility of government backing to encourage a deal that would prop up the bank, people with knowledge of the situation said. Shares fell Wednesday morning.
The group has come up with a variety of measures to make the company more more attractive for potential investors or buyers, as part of an effort to ensure there is no other bankruptcy from a US bank, said the people, who asked not to be named because they conversations are confidential.
A group of financial firms raised 30 billion dollars and would save the First Republic bank
Among the options, the US government could play a role in removing First Republic’s assets that have eroded its balance sheet. Although heInvestors have expressed interest in helping, the company’s unrealized losses have been a sticking point. Additional ideas include offer liability protectionapply capital rules more flexibly or lower limits on ownership stakes, the people said.
the talks continue. A variety of issues remain unresolved and a deal is not guaranteed, the people said. It is not clear how the government would provide financial support.
First Republic Bank would receive a rescue of US $ 30,000 million in deposits
A spokesman for the White House referred questions to banking regulators. Representatives of the Federal Reserve, the Treasury Department and the First Republic declined to commentand the FDIC did not respond to requests for comment.
First Republic, a bank based in San Francisco, known for catering to wealthy tech executives, has lost 88% of its stock value this year as clients withdrew their money, putting pressure on the bank to sell assets that had fallen in value amid rising interest rates. an attempt to 11 strongest banks to prop up the financial institution through $30 billion in deposits last week gave the company and advisers, including JPMorgan Chase & Co.more time to find a way to resolve tensions.
Treasury Secretary, Janet Yellen, said on Tuesday that the United States could take additional extraordinary measures if other small banks are threatened. He noted that the government is committed to mitigating financial stability risks where necessary and that the public must have confidence in the country’s banking system.
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