US investigates extra financial assistance to the advantage of First Republic


According to anonymous sources, despite banking regulations indicating that remedies should not be designed to favor a certain bank, this adjustment might be framed “in a way to ensure” that First Republic benefits.

According to sources acquainted with the matter, United States regulators allegedly consider “expanding” an emergency loan line for banks, which might offer First Republic Bank more time to resolve balance sheet difficulties.

According to reports, authorities found the First Republic “stable enough to operate” without the need for “immediate intervention” while the bank works to “shoring up its balance sheet.”

The sources reportedly noted that while the Fed’s liquidity offerings would be expanded by banking law, which stipulates that it must be “broad-based” and not intended to benefit a specific bank, the change could be “made in a way” that helps First Republic Bank.

It was claimed that despite First Republic’s fundamental issues with its balance sheet, “the bank’s deposits are stabilising” and there is no fear of “the kind of sudden, severe run” that prompted authorities to liquidate Silicon Valley Bank. It was observed:

“According to individuals, it has sufficient funds to cover customer demands while it investigates potential solutions. This includes $30 billion deposited this month by the nation’s top banks.”

On March 19, the Fed revealed its intention to improve liquidity through “swap lines,” which include an arrangement between two central banks to trade currencies.

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