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First Republic rescued.

 

First republic bank office
A consortium of Wall Street’s biggest investment banks rescued First Republic Bank with $30 billion in deposits last night to calm financial markets after the recent failure of three US banks and continuing fallout from Credit Suisse.

A statement from the group said that JPMorgan Chase, Citigroup, Bank of America, Wells Fargo, Goldman Sachs and Morgan Stanley were involved with others in the rescue of the California-based bank.

First Republic’s shares had a volatile day closing up $3.11, or 10 per cent, at $34.27 during regular trading hours, then losing 18 per cent, or $6.45, to $27.85 in late trading on Wall Street.

While attention in the US was focused on the First Republic, the problems affecting Credit Suisse dominated the headlines in Europe.

After the Swiss central bank stepped in to provide a £45 billion lifeline to the country’s second-biggest bank, it emerged that the chairman of Credit Suisse was facing three class actions for allegedly misleading shareholders in the months leading up to the crisis.

Neither Lehmann nor Credit Suisse has commented on the lawsuits.

Other banks have also come under pressure amid reports that hedge fund managers are adding to their «down bets» on the sector. Bridgewater Associates, Millennium Management and Marshall Wace are among those intensifying short positions in European banking shares, according to data from Breakout Point. Short-sellers had amassed bearish positions worth more than $15.7 billion against European banks by Tuesday, according to S&P Global Market Intelligence.

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Comments

  1. Nate17 March 2023 at 13:05

    Moving fast and depositing this much money has reduced pressure on First Republic Bank and on the whole banking industry as a whole. A smart move.

    ReplyDelete
  2. Chris17 March 2023 at 13:35

    The situation with Credit Suisse is a dire one. I don't see it lasting the year if major support for them doesn't arrive. This bank is surrounded by problems and scandals.

    ReplyDelete
  3. George17 March 2023 at 14:14

    They need a full cleanup there otherwise it's just a waste of time and money as even if they are saved, this will happen again. The Chairman should have been sacked by now. What are they waiting for?

    ReplyDelete

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