JPMorgan is working with Citigroup, Bank of America and Wells Fargo on a scheme to they could provide a lifeline for the First Republic – people familiar with the matter told the paper. Morgan Stanley and Goldman Sachs, as well as US Bancorp and PNC Financial Services may also play a role in the story.
According to the sources, the details of the deal may be made public as early as today.
The situation is fluid, and whether the deal will happen and exactly what it might look like is still very much uncertain, but any deal would need the nod from regulators. First Republic’s shares have fallen sharply since the bankruptcy of Silicon Valley Bank last week, the quotation fell more than 20 percent at the opening of the market today, due to concerns about the bank’s situation, but since then the price has recovered sharply on the news of the possibility of rescue. the share is now up 6.7 percent.
First Republic came under the crosshairs of investors after the collapse of Silicon Valley Bank last week, which seriously shook confidence in regional banks with large amounts of uninsured deposits – customers have since withdrawn billions of dollars worth of deposits from First Republic. The bank was provided by the Federal Reserve and JPMorgan over the weekend with an agreement containing additional financing tried to stem the outflows, which provided the bank with a total of $70 billion in available liquidity.
But yesterday, First Republic’s share price fell more than 20 percent after S&P downgraded its credit rating from A to BB+, or downgraded it to the bovli categoryas there were concerns that depositors could withdraw their money from the bank to a greater extent.
Cover photo: Michael M. Santiago/Getty Images
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