The private sector reached a deal to save the bank, which is better than imposing a receivership on it
Three sources said that US officials are coordinating urgent talks to save the First Republic bank, after private sector efforts led by the bank’s advisers have failed to reach an agreement so far.
The sources added that the Federal Deposit Insurance Corporation, the Treasury Department and the US Federal Reserve Board are among the government bodies that have recently begun organizing meetings with financial companies to save the troubled bank.
One of the sources stated that while the government has been communicating with the bank and its advisors for weeks, its recent participation in drawing up a plan to rescue the bank will lead to the joining of other parties, including banks and private equity firms, to the negotiating table.
It is not clear whether the US government is considering participating in a private sector bailout for First Republic.
One of the sources said the government’s involvement has emboldened the bank’s executives as they race to reach an agreement that would prevent a takeover by US regulators.
The First Republic became the epicenter of a banking crisis in the United States in March after its wealthy clients began withdrawing deposits, leaving it reeling.
Shares of the bank rose 3.8% on Friday after Reuters reported that the US government was coordinating talks to rescue the bank.
Two sources said that US officials consider that the private sector reaching a deal to save the bank is better than imposing a judicial receivership on it by the Federal Deposit Insurance Corporation.
2023-04-29 06:17:00
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