Regulators are likely to seize First Republic Bank, making it the third lender to fail since March
plan, the Federal Deposit Insurance Corporation, the bank’s principal federal regulator, would place First Republic in receivership before quickly selling it. As the “receiver” for a failed bank, the FDIC temporarily manages its affairs and seeks to obtain the greatest value possible for its remaining assets.
It is not clear whether the government will guarantee all First Republic deposits, including those above the $250,000-per-account federal limit, as it did for the two banks that failed last month. Officials want to discourage any potential outflow of funds from other midsize banks, but they fear that solution might be perceived as benefiting whichever Wall Street giant acquires the troubled bank, the people said.
First Republic, however, also comes with tens of billions of dollars in unrecognized losses from the securities and loans on its balance sheet. It is not clear whether the new owner is expected to hold those assets until they mature or whether it will receive some other consideration to sweeten the pot.U.S. bank to fail since March 10, when Silicon Valley Bank collapsed, igniting fears of broader financial distress. Since last month’s dramatic events, Treasury Secretary Janet L.
Talks over the bank’s fate hurtled toward a conclusion one day after regulators released a pair of reports that blistered government supervisors and bank executives for the failures last month of two midsize institutions in California and New York.
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