The latest effort to stem the crisis of confidence roiling the banking sector may involve a team tackle by some of the largest banks in the U.S., according to reports.
The Wall Street Journal reported J.P. Morgan Chase is working with Citigroup, Bank of America, and Wells Fargo to provide a lifeline to First Republic Bank. The Journal said that Morgan Stanley, Goldman Sachs, U.S. Bancorp, and PNC Bank are also involved in the discussions.
Bloomberg News reported that the rescue talks are being orchestrated by the U.S. government.
The Wall Street Journal reports:
The situation is fluid and whether a deal comes together and what it might look like is still highly uncertain. Any deal would need the blessing of regulators and will be driven at least in part by the bank’s highly volatile stock. First Republic’s stock has been pummeled for days and fell another 23% Thursday over concerns about the bank’s health in the wake of the collapse of Silicon Valley Bank.
First Republic came under a spotlight after Silicon Valley Bank’s collapse last week sparked concerns about other regional banks with large collections of uninsured deposits. Customers yanked billions of deposits out of First Republic and the bank over the weekend sought to stem the tide with a deal, announced Sunday, involving additional funding from the Federal Reserve and JPMorgan that gave the bank a total of $70 billion in available liquidity.
First Republic’s shares have crashed by more than 60 percent over the past five trading days.
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