Fears mount over US banking crisis as major lender struggles RT Business News
Fears mount over US banking crisis as major lender struggles
First Republic says it plans to sell off assets, restructure its balance sheet, and lay off staff
FILE PHOTO: First Republic Bank headquarters is seen on March 16, 2023 in San Francisco, California, United States.
Tayfun Coskun / Anadolu Agency via Getty Images
Shares in First Republic Bank plunged another 30% on Wednesday following a wipeout one day previously, after the struggling US lender revealed that depositors had withdrawn more than $100 billion in the first quarter.
The banks stock dropped 49% on Tuesday after the San Francisco-based lender disclosed that it had lost 40% of its deposits, fueling fears of further bank collapses in the US.
The concerns follow the failures of Silicon Valley Bank and Signature Bank in March, leaving the US banking sector facing its biggest crisis of confidence since the 2007-2008 financial crash.
Investors got a sharp reminder on Tuesday that the US banking crisis and broader credit crunch are not over, the chief US economist at Gavekal Research, Will Denyer, commented.
First Republic is considering strategic options to raise capital and avoid being seized by US regulators, according to media reports. A source familiar with the matter told Yahoo Finance that a bailout plan would require assistance from the US government.
There is an open bank path solution here, but its a matter of the government needing to convene to bring all the parties together to make it happen, he said.
Thursday, April 27, 2023 at 11:18 am