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First Republic Bank shares volatile amid report of possible government backstop

Published Mar 22, 2023 05:40AM ET Updated Mar 22, 2023 11:13AM ET
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By Scott Kanowsky 

Investing.com -- Shares in First Republic Bank (NYSE:FRC) oscillated between gains and losses in volatile U.S. trading on Wednesday, as negotiators in Washington and on Wall Street reportedly discussed potential government backing to stabilize the beleaguered regional lender.

U.S. officials and banking industry executives are in talks over the possibility of government support for First Republic to bolster confidence in the California-based bank and make it more attractive to wary investors, according to Bloomberg News, citing sources familiar with the matter. The government could also help remove assets that are negatively impacting First Republic's balance sheet, Bloomberg News said.

In a separate report, the Wall Street Journal said financial industry executives are looking at ways to boost First Republic's capital, with some banks even potentially positioning to make investments themselves.

This comes after a group of 11 U.S. lenders, including JPMorgan Chase (NYSE:JPM), Bank of America (NYSE:BAC), and Citigroup (NYSE:C), banded together last week to inject $30 billion in deposits into First Republic in a bid to offset a spike in withdrawals and quell a recent panic sparked by a series of bank failures this month.

The high-stakes talks around First Republic have contributed to heavy volatility in the stock this week. Shares closed up by nearly 30% on Tuesday, rebounding from a sharp drop in the prior session that saw it slip to a record-low closing price of $12.18.

But First Republic has still plunged by more than 80% over the past two weeks as the failure of three U.S. banks, including Silicon Valley Bank, hit smaller lenders and caused customers to rush to take out their deposits.

First Republic Bank shares volatile amid report of possible government backstop
 

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Comments (3)
Thomas Thorn
Thomas Thorn Mar 22, 2023 9:35PM ET
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it's already failed...that part is well known. how the government postures the failure is all that needs figuring out. the $30 billion infusion from 11 banks in sure is all government backed, it was step 1 in managing the public reaction to the failure. some larger bank will come in for .03c on the $1 and take over. the government will cover any/all wealthy deposits. the next teir of failures from less wealthy depositers will not be covered as all wealthy and connected depositers have moved over to safe havens.
Derick Lim
Derick Lim Mar 22, 2023 6:38AM ET
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In my next life I want to be a banker.........
سوسو رانيا
سوسو رانيا Mar 22, 2023 6:38AM ET
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200
jason xx
jason xx Mar 22, 2023 6:04AM ET
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These big banks aren't teaming up out of kindness. Things must be worse than they are letting on i bet
Thierry Lebeau
Thierry Lebeau Mar 22, 2023 6:04AM ET
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The big banks that are helping to bail are getting a piece of the pie, plus they received the boom in business accounts when the businesses quit depositing in First Republic.
Derick Lim
Derick Lim Mar 22, 2023 6:04AM ET
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There's no honour among crooks........
Robby Hartanto
Robby Hartanto Mar 22, 2023 6:04AM ET
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pay less attention on the motives for this issue
 
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