According to insiders, the financial institution First Republic, which got caught up in the banking crisis in the USA, is to be saved before the Asian stock exchanges open on Monday. The state deposit insurance fund FDIC has started a sales process for it, several people familiar with the matter said on Saturday.
According to insiders, half a dozen banks are taking part in the bidding process, including JPMorgan Chase, Citizens Financial and PNC Financial Services. The state Federal Deposit Insurance Corp (FDIC) will be advised by the investment bank Guggenheim. Bidders were given a glimpse of First Republic books over the weekend. The FDIC wants to place the bank under receivership on Monday night and at the same time announce an agreement in the sales process.
The First Republic is already the third US bank that has recently found itself in existential difficulties because customers withdrew their deposits en masse. As a result, Silicon Valley Bank and Signature Bank collapsed in March. In a concerted effort, major banks initially poured $30 billion into First Republic Bank, which was also reeling.
Earlier in the week, however, the First Republic disclosed a deposit outflow of more than $100 billion in the first quarter. The vicious circle then accelerated. Investors sold shares in the bank en masse, after which the stock market crashed. It was announced on Friday that the FDIC had identified a further deterioration in the bank’s situation and had launched a new bailout.
The US Federal Reserve blamed former President Donald Trump for the collapse of the Silicon Valley bank. In an investigative report, the Federal Reserve concludes that relaxation of safeguards against financial crises enacted in 2018 contributed to the collapse of the regional institute in California. Banking supervision has been weakened by the Trump administration.
More: First Republic Bank before the end – A solution is expected for Sunday