- The US government is reportedly planning to seize First Republic Bank as per Fox News.
- Although a seizure has not been officially ordered, it is quite probable as per Gasparino.
First Republic Bank (FRC) now risks a similar fate after Silvergate and Signature Bank failed late last month since it has few choices to turn things around. This might soon become the third big bank to fall this year, spreading widespread panic throughout the United States and abroad. The bank said today that it had lost deposits totaling about $100 billion amid the financial crisis that began last month.
The US government is reportedly planning to seize First Republic Bank, according to a report by Fox Business Network. Fox reporter Charles Gasparino quotes bankers who are now dealing with the First Republic as saying that they anticipate a government receivership for the failing bank in the near future.
SCOOP (1/2): Bankers working w @firstrepublic bank say they expect eventual govt receivership for the ailing bank after it exhausts private sector solutions such as asset sales and finding a buyer, both of which appear difficult. Officials at the big banks believed the Feds were
— Charles Gasparino (@CGasparino) April 25, 2023
It will do this only if it is unable to find a buyer or sell its assets via the private sector, both of which “appear difficult.” More than 40%, or around $72 billion, was taken out of First Republic’s bank accounts in the first quarter of this year. As of Tuesday’s close, its stock price had dropped by almost half. The bank made the announcement on Monday.
Crypto Market Rallies
Since the closure of the Silicon Valley Bank in March, the bank’s fortunes have plummeted to unprecedented lows during the previous month and a half. There are a number of large banks that have also been having trouble, but it seems that First Republic may soon be taken over by the US government.
Gasparino claims that although a seizure has not been officially ordered, it is quite probable at this point. As of yesterday, stockholders are also suing the First Republic. They claim the bank is covering up the effect that higher interest rates have on business models, which includes a flight of depositors. The crypto market has turned bullish on the news of the banking crisis. Bitcoin is now up 5% and is trading at $28,675 as per CMC.
