Source: Wall Street News
Author: Han Xuyang
People familiar with the matter revealed that expanding the Federal Reserve's latest emergency loan mechanism, the Bank Term Financing Plan (BTFP), is one of the options the government has recently weighed.
The US government is considering providing more support to banks to stabilize the First Republic and other regional banks.
On Saturday local time, according to media quoting people familiar with the matter, the US government is considering expanding the Federal Reserve's support for First Republic Bank to give the bank more time to support its balance sheet.
According to people familiar with the matter,Officials have yet to decide what support they can provide to the bank, and expanding the scope of the Fed's loans is one of several options to be weighed at this early stage.Regulators are still trying to resolve the issues of two other bankrupt banks — Silicon Valley Bank and signature bank Signature Bank — which require more urgent attention.
People familiar with the matter also said that even without taking this step, regulators think First Republic Bank is stable enough to operate without any immediate intervention, as the company and its advisors are trying to reach an agreement to support its balance sheet.
Since this month, due to investors' concerns$First Republic Bank (FRC.US)$The possibility of bankruptcy, the bank's stock price has already plummeted by nearly 90%. US government officials have been closely monitoring the company's health and progress, and are alert to prevent any unexpected situations.
However, people familiar with the matter said that in the end, government officials still came to a conclusion --Bank First Republic's deposits are stabilizing, and it is less likely that there will be a sudden serious run of money like the Bank of Silicon Valley.Despite structural issues with the bank's balance sheet, while searching for solutions, the bank still has enough cash to meet customer needs, including the $30 billion that several US banks have deposited into it this month.
People familiar with the matter also revealed thatExpanding the Federal Reserve's latest emergency loan mechanism, the Bank Term Financing Plan (BTFP), is one of the options that the government recently weighed.Any expansion of the Federal Reserve's liquidity supply to all eligible users is in line with the Banking Act, which states that the remedy must be based on a broad basis, not specifically designed to help a particular bank. This change ensures that Bank of the First Republic benefits.
Editor/Somer