According to the latest reports, the beleaguered financial institution First Republic Bank (FRC) proposed to raise capital by offering the bonds it owns to the U.S. government for an above-market value. However, reports suggest that at this point in time, the government is not inclined to participate in the negotiations.
U.S. Govt. Backs Out Of FRC
According to a report by CNBC, advisors to First Republic will now attempt to persuade larger U.S. banks that have already bailed it out to extend their assistance by asking for one more favor. As things currently stand, First Republic’s survival depends on the level of persuasion that one group of bankers can exert over another group of bankers.
Read More: Bitcoin Price Jumps Nearly 10%; Looks To Regain $30K
First Republic advisors are confident that other parties will step up to assist the bank in recapitalizing itself — if they are successful in persuading large banks to buy bonds for more than they are worth — to accept the brunt of investment losses for the benefit of the banking system as well as for their own welfare.
Broadening US Banking Fiasco
The abrupt failure of Silicon Valley Bank last month served as the catalyst for a weeks-long drama that has since taken several turns. A few days after the government seized SVB and Signature, which were both large-scale banks plagued by major bank runs, the largest lenders in the country came together to deposit $30 billion into First Republic.
However, after the company’s most recent earnings conference revealed the extent of its issues, that remedy proved to be temporary. The crumbling financial institution admitted on Wednesday, as was previously reported on CoinGape, that it had lost nearly $100 billion in deposits during the banking crisis that occurred a month ago.
The most recent report does not appear to have taken the market by surprise, as can be seen in the share price of FRC which dropped by a whopping 36% on Wednesday after witnessing a similar fate yesterday. As of now, further trading has been temporarily halted with the stock price falling to its all-time low of $5.17 at the time of writing.
Also Read: Binance Terminates $1 Bn Voyager Acquisition Deal, Now What’s Next?
The post Just-In: First Republic Bank Crisis Deepens As US Govt. Refuses Intervention appeared first on CoinGape.