According to a Reuters report on Friday, US officials are holding urgent negotiations in an effort to save First Republic Bank as private sector efforts headed by the bank's advisors have not yet resulted in a solution.
The Federal Reserve, the Treasury Department, and the Federal Deposit Insurance Corporation (FDIC) are some of the governmental entities that have recently begun to speak with financial corporations about putting together a lifeline for the struggling lender.
Shares of First Republic earlier this week dropped by almost 50% when the mid-size bank revealed that amid the banking panic last month, consumers had withdrawn more than $100 billion from their accounts.
First Republic was one of the banks most at risk of failing after a string of bank failures stoked concerns about a sectoral crisis.
According to the Reuters article, the government's engagement is assisting in bringing additional parties to the bargaining table, such as banks and private equity groups. However, it is still unknown if the US government is thinking about taking part in a First Republic private sector rescue.
Since 11 of the largest US lenders placed $30 billion at the bank on March 16 to avert a regional banking crisis that resulted in the demise of Silicon Valley Bank and Signature Bank, Wall Street institutions have been working to find a solution for First Republic.
After Silicon Valley Bank, the 16th largest lender in the nation, collapsed last month, the biggest failure of a US bank since 2008, issues in the banking sector began to emerge in the US.
The fall of New York's Signature Bank came after that. In an effort to stop future runs on bank deposits, authorities intervened to guarantee deposits above customary limits.