- In March, customer capital outflows from the organization exceeded $100 billion
- With the bank “up to its neck” in debt
- First Republic Bank’s stock has fallen more than 50%
- Bankers expect it to be seized as soon as
First Republic Bank could be seized by federal authorities, as it was with Signature.
On Tuesday, April 25, the organization’s shares fell more than 50 percent after the release of its Q1 financial report.
As it turned out, customers withdrew about $100 billion from the bank in March alone..
This calls into question the organization’s solvency and also threatens to bring a new round of crisis to the U.S. financial system.
Fox News senior correspondent Charles Gasparino, citing his sources, said the bank has exhausted options to resolve the.
Allegedly a scenario in which First Republic finds a major investor or quickly sells off some of its assets seems unlikely.
As he said, some bankers seriously expect the organization to be arrested soon..
After that, the bank will be taken over by the FDIC (Federal Deposit Insurance Corporation), which will sell it “under the hammer.”
The situation is complicated by the fact that in July the deadline for loans from major financial counterparties.
Recall that in March, First Republic Bank received about $30 billion in short-term loans from partners to stabilize the liquidity situation.
Also in Q1 the bank sought help from the Fed. The regulator gave the organization a $92 billion loan, which helped “patch the hole” in the budget.
But by doing so, the organization has effectively replaced assets with liabilities in the form of accounts payable.
With this, FRB has no plan to get out of the crisis.. Some of the costs are planned to be covered by reducing the staff by 20-25%, but that’s all.
And how the organization will cope with the problem of insufficient liquidity is still unknown.