Tumbling Bank First Republic: US sovereign wealth fund in talks with potential buyers


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Tumbling Bank First Republic
US sovereign wealth fund is negotiating with potential buyers

First Republic Bank lost more than $100 billion in deposits in the first quarter. The security fund FDIC wants to put the US bank under receivership, it is said. You are already negotiating with potential buyers.

According to insiders, the financial institution First Republic, which got caught up in the banking crisis in the USA, is to be saved before the Asian stock exchanges open on Monday. The state deposit insurance fund FDIC has started a sales process for it, said several people familiar with the matter. Half a dozen banks are participating in the bidding process, including JPMorgan Chase, Citizens Financial and PNC Financial Services.

The state Federal Deposit Insurance Corp (FDIC) will be advised in the process by the investment bank Guggenheim, it said. Bidders were given a glimpse of First Republic books over the weekend. The FDIC wants to place the bank under receivership on Monday night and at the same time announce an agreement in the sales process.

The First Republic is already the third US bank that has recently found itself in existential difficulties because customers withdrew their deposits en masse. As a result, Silicon Valley Bank and Signature Bank collapsed in March. In a concerted action, major banks had initially put $ 30 billion into the First Republic Bank, which was also reeling, in order to save it.

Relaxed precautions

Earlier in the week, however, the First Republic disclosed a deposit outflow of more than $100 billion in the first quarter. The vicious circle then accelerated. Investors sold shares in the bank en masse, after which the stock market crashed. It was announced on Friday that the FDIC had identified a further deterioration in the bank’s situation and had launched a new bailout.

The US Federal Reserve blamed former President Donald Trump for the collapse of the Silicon Valley bank. In an investigative report, the Federal Reserve concludes that relaxation of safeguards against financial crises enacted in 2018 contributed to the collapse of the regional institute in California. Banking supervision has been weakened by the Trump administration.

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