First Republic Bank, a San Francisco-based bank, is facing imminent collapse, according to reports from various news outlets. The Federal Deposit Insurance Corporation (FDIC) is said to be preparing to take over the bank (Fox Business, Reuters). The bank’s shares have plummeted by more than 90% this year, following the failure of two regional lenders in March (CNBC). On Friday, the stock fell by more than 45% in after-hours trading, leading to growing concerns about the bank’s future (Barron’s). As a result, private-sector efforts to rescue the bank, led by the bank’s advisers, have so far been unsuccessful (Reuters).
These developments have renewed fears of a banking crisis, with some experts questioning whether the crisis is over (ABC News). The rescue scenarios being considered for First Republic Bank are reportedly not likely to be good for current shareholders (Los Angeles Times). The stock price has cratered, now down 98% from its 52-week high (Forbes).
The potential collapse of First Republic Bank could have far-reaching consequences, with some speculating that it could play out in three ways, two of which would be terrible for shareholders (Fortune). Bankers have made a pitch to save the bank, urging people to help now or face paying more later when it fails (CNBC).
The situation with First Republic Bank is a reminder of the fragility of the banking industry, and underscores the importance of strong regulations and oversight to prevent such collapses in the future.
