US regulators are trying to find a new buyer for the bank because it’s been having some troubles. The Federal Deposit Insurance Corporation (FDIC) has asked six banks to make a bid for First Republic Bank, and we might hear about a deal as soon as Sunday.
Last week, First Republic Bank told everyone that customers took out $100bn from their bank accounts in March. This made their shares drop a lot because people started worrying that there might be a banking crisis. A similar thing happened to Silicon Valley Bank and Signature Bank, which both collapsed.
The FDIC is a financial regulator in the US, and they asked for bids for First Republic Bank last week. They’ve been looking at them all weekend. Investment banking giant JP Morgan Chase and Bank of America are two of the banks that might buy the bank.
There are some concerns about the banking industry all over the world because central banks have been raising interest rates a lot. This has affected how much money banks have, and it’s making people worried that other banks might be in trouble like First Republic Bank.
First Republic Bank is a mid-sized bank, just like Silicon Valley Bank. In March, 11 US banks gave First Republic Bank $30bn to try to help them out, including JP Morgan Chase. But then last week, they said how much money people had taken out in March and that made investors worried.
First Republic Bank has lots of wealthy clients who might lose money if the bank isn’t sold. In the US, the FDIC insures deposits up to $250,000, so if people start worrying and taking their money out of the bank, the FDIC will guarantee their money to prevent a run on the bank.
If the FDIC can’t find a buyer for First Republic Bank, they might have to do something similar to what they did when Silicon Valley Bank and Signature Bank collapsed.