A branch of First Republic Bank in San Francisco
Those: pa/dpa/AP/Jeff Chiu
According to media reports, the state deposit insurance fund in the USA has initiated the sale of the financial institution First Republic, which has found itself in financial difficulties. It would be the third US bank since March not able to survive on its own.
DAccording to insiders, the First Republic financial institution, which got caught up in the banking crisis in the USA, is to be rescued before the Asian stock exchanges open on Monday. The state deposit insurance fund FDIC has started a sales process for it, several people familiar with the matter said on Saturday. The „New York Times“ also reports.
According to insiders, half a dozen banks are taking part in the bidding process, including JP Morgan Chase, Citizens Financial and PNC Financial Services. The state Federal Deposit Insurance Corp (FDIC) will be advised by the investment bank Guggenheim. 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 effort, major banks initially poured $30 billion into First Republic Bank, which was also reeling.
Fed blames Trump administration
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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