First Republic Bank will most likely come under the control of the FDIC. Game over

29 April 20231 year ago babelfish

It's over now for the First Republic Bank. According to what was reported by Reuters, it now seems very probable that it will come under the control of the FDIC, the Federal Depost Insurance Corporation, i.e. the federal insurance agency that guarantees deposits and intervenes in the event of a bank's bankruptcy. The FDIC has already intervened in Silicon Valley Bank and Signature Bank, and can only intervene in the face of losses and a 97% drop in stock value in six months

The bank's attempt to be refinanced by the banking system, which we recently talked about, obviously appears to have failed, so there is no other solution. Eventually JP Morgan and PNC Bank will buy the institution, but only after the intervention of the FDIC to recapitalize the bank . Nobody is stupid…

Former Treasury Secretary Lawrence Summers slammed Washington regulators and US banking giants for not already finding a solution for beleaguered lender First Republic Bank, despite it asking for help: “I'm surprised and disappointed that this situation has continued for so long, with the bank's shares down 95%” and credit indicators deteriorating, Summers told Bloomberg Television's “Wall Street Week” with David Westin. "I hope the best way forward is found between the banks, the FDIC and other public authorities within the next week or 10 days." “It's things like wildfires, they're much easier to prevent than contain them after they start to spread,” Summers said.

He expressed no preference for an FDIC takeover or "a private sector-oriented deal." "But we need to find an answer to that question as quickly as possible and move forward."

There were certainly huge leaks from the warehouses on Friday. We will know on Monday, but who knows if the bank will be able to deal with all the withdrawals…

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Article First Republic Bank will most likely come under the control of the FDIC. Endgame comes from Economic Scenarios .

This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/first-republic-bank-molto-probabilmente-andra-sotto-il-controllo-del-fdic-fine-dei-giochi/ on Sat, 29 Apr 2023 06:00:32 +0000.