JPMorgan Chase Emerges as Key Player in Race to Rescue Troubled First Republic Bank
First Republic Bank is in trouble, and the U.S. Federal Deposit Insurance Corporation (FDIC) is preparing to put the bank under receivership.
The regulator has reportedly determined that the bank’s situation has deteriorated to the point where there is no more time to pursue a private-sector rescue.
The FDIC, Treasury Department, and Federal Reserve are currently engaged in urgent discussions with financial institutions regarding a solution for a troubled lender.
To this end, the FDIC has solicited final bids for First Republic Bank from several banks, including JPMorgan Chase, PNC Financial Services Group, and Bank of America.
The banks were requested to provide details such as the proposed price and estimated cost to the agency’s deposit insurance fund.
According to the Wall Street Journal, the banks are competing to acquire First Republic in the event of a government seizure, which could happen as soon as this weekend.
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First Republic has reported a deposit decline of over $100 billion in Q1, and its shares fell 43%, contributing to a week-long stock decline of 75%. Should the San Francisco-based lender fail, it would be the third U.S. bank to do so since March.
The FDIC’s involvement in the bidding for an available institution remains unverified. In the past, First Republic intended to either establish a “bad bank” or vend certain assets like securities and its mortgage book; however, it did not receive backing from bigger banks or private equity firms.
The bank intends to reduce its balance sheet and lower expenses by decreasing executive compensation, downsizing office space, and terminating around 20% to 25% of its workforce during Q2.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
