The turmoil at First Republic is sparking speculation that federal regulators could step in with a rescue package to shore up its shaky finances.
Biden officials are reportedly growing increasingly concerned that the bank is running out of time to reassure depositors and investors, FT is reporting., which recently led an effort among other lenders to prop up First Republic to the tune of $30 billion in an emergency investment, to step in with a rescue plan, according to FT.
Another option is for the Federal Deposit Insurance Corporation to take over the bank and offer a government backstop for all deposits — just as it did with Silicon Valley Bank and Signature Bank of New York, FT reported. Biden administration officials are said to be alarmed by First Republic’s inability to shore up its shaky balance sheet. Treasury Secretary Janet Yellen is seen above.One option being discussed is to have the Federal Deposit Insurance Corporation take over the bank and backstop deposits. FDIC chair Martin Gruenberg is seen above.FT cited “a person close to First Republic” as saying that the bank would agree to the government “convening the relevant parties to come up with a solution.
Biden officials at the White House and the Treasury as well as Federal Reserve personnel have been in touch with First Republic. CNBC reported early on Wednesday that First Republic’s advisers have already lined up potential purchasers of new stock in the lender if they can fix the bank’s balance sheet.
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