Wall Street leaders and U.S. officials discussing an intervention at First Republic Bank are exploring the possibility of government backing
all Street leaders and U.S. officials discussing an intervention at First Republic Bank are exploring the possibility of government backing to encourage a deal that would shore up the lender, people with knowledge of the situation said. The shares dropped Wednesday morning.
Among options, the government could play a role in lifting assets out of First Republic that have eroded its balance sheet. While investors have expressed interest in helping, the firm’s unrealized losses have been a sticking point. Additional ideas have included offering liability protection, applying capital rules more flexibly or easing limits on ownership stakes, the people said.
A White House spokesperson referred questions to banking regulators. Representatives for the Federal Reserve, Treasury Department and First Republic declined to comment, and the FDIC didn’t respond to requests for comment.First Republic, a San Francisco-based lender known for catering to wealthy tech executives, has lost 88% of its stock market value this year as customers pulled their money, pressuring the bank to sell assets that had declined in value amid interest-rate hikes.
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