AP sources: Banks working on rescue plan for First Republic
By Ken Sweet, The Associated Press on March 16, 2023.
NEW YORK (AP) – A group of Wall Street banks is planning a rescue package of at least $20 billion for First Republic Bank, sources told The Associated Press on Thursday. The rescue package comes as San Francisco-based First Republic has been battered by investors and worries have grown that the midsized bank might be the next to fail, after Silicon Valley Bank and Signature Bank. Sources familiar with the matter said that JPMorgan Chase, Citigroup, Wells Fargo and Goldman Sachs are part of the group of banks pulling together the package. It is likely to consist of $20 billion in deposits and capital for First Republic, but it might be as high as $30 billion. The sources spoke on the condition of anonymity because the package was still being developed. A First Republic spokesman declined to comment on the reports. First Republic Bank’s stock has faltered as customers began pulling their deposits out. But it was up more than 3% Thursday after reports of the recue package surfaced. The news comes after the collapse last week of Silicon Valley Bank, which was the second biggest bank failure in U.S. history after the demise of Washington Mutual in 2008. The shuttering of Silicon Valley Bank Friday and of New York-based Signature Bank two days later has revived bad memories of the financial crisis that plunged the United States into the Great Recession of 2007-2009. Over the weekend the federal government, determined to restore public confidence in the banking system, moved to protect all the banks’ deposits, even those that exceeded the FDIC’s $250,000 limit per individual account. The White House had no comment Thursday on the reports of the rescue package for First Republic Bank, which has more than $200 billion in assets. 11-10
