It could be heading towards the third banking collapse of the United States in a short time. The US authorities asked banks and financial institutions to submit offers to the crisis bank of the First Republic.
US authorities have asked JP Morgan, PNC, Citizens Financial Group and several other financial institutions to submit bids for California-based First Republic Bank. He writes financial times and Reuters. The authorities are doing this to see how much the bank insurance fund, the FDIC, will have to pay to bail out what’s left of the bank.
The banks that were asked to participate in the bidding process would not comment on the situation, either to the Financial Times or Reuters.
On the Friday before the weekend, First Republic’s share plunged 43 percent on Wall Street following rumors that US authorities would put the bank under administration. mean at the same time Sources Reuters spoke to, That the bank’s management will do everything to avoid bailouts from the authorities.
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Now that seems inevitable, according to the Financial Times. The paper has spoken to several people close to the process, and they believe it is now clear to all parties; If the bank is to be saved, it will need help from the FDIC.
According to Reuters, a show is expected to be announced on Sunday evening, CST. According to sources the news agency spoke to, banks are now calculating how much to give from First Republic.
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Sunday deadline
First Republic has been in hard times for a long time, and was bailed out in mid-March by a number of large US banks. Now it turns out that this did not last long. The company’s stock has fallen more than 97 percent this year. The First Republic’s trouble comes after the recent storm in the banking sector.
On Wednesday of this week, the FDIC asked several banks what they were willing to pay for First Republic deposits and assets, in order to get an overview of the size of potential losses.
On Friday, the hedge fund again contacted several financial institutions to obtain more detailed information on the state of the First Republic’s finances. According to the Financial Times, these financial institutions have been given access to detailed data and information, so they can form an opinion on the value of a crisis bank.
Those contacted have been given until Sunday to submit a bid. If First Republic is taken over by the FDIC, it will go down in the history books as one of the largest bank failures in American history, according to the Financial Times.
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