{"id":2573,"date":"2023-03-18T15:02:29","date_gmt":"2023-03-18T20:02:29","guid":{"rendered":"https:\/\/embarrdowns.com\/financial-turmoil-30b-rescue-package-for-first-republic-bank-fails-to-calm-jittery-investors\/"},"modified":"2023-03-18T15:02:30","modified_gmt":"2023-03-18T20:02:30","slug":"financial-turmoil-30b-rescue-package-for-first-republic-bank-fails-to-calm-jittery-investors","status":"publish","type":"post","link":"https:\/\/embarrdowns.com\/financial-turmoil-30b-rescue-package-for-first-republic-bank-fails-to-calm-jittery-investors\/","title":{"rendered":"Financial Turmoil: $30B Rescue Package for First Republic Bank Fails to Calm Jittery Investors"},"content":{"rendered":"

The banking sector has been in turmoil in recent days, with two banks \u2013 Silicon Valley Bank and Signature Bank \u2013 failing after experiencing sudden cash crunches.[0]<\/a><\/sup> This has caused a series of events leading to a $30 billion rescue package for First Republic Bank (FRC) from 11 of the nation\u2019s largest lenders, including JPMorgan (JPM), Citigroup (C), Bank of America (BAC), and Wells Fargo (WFC).[1]<\/a><\/sup><\/p>\n

The rescue package has done little to calm jittery investors, and First Republic\u2019s stock has dropped 32.8% since the announcement on Thursday.[2]<\/a><\/sup> Shares of the SPDR S&P Regional Banking ETF (KRE) have also plummeted 24.5% in the past seven trading days, as analysts fear the depositor-driven panic could slow the economy later this year.[3]<\/a><\/sup><\/p>\n

As depositors have withdrawn an estimated $90 billion from First Republic, the bank also announced it borrowed tens of billions of dollars from the Federal Reserve and the Federal Home Loan Bank over the past week.[4]<\/a><\/sup> First Republic had about $180 billion in deposits heading into this year, 68% of which exceeded the Federal Deposit Insurance Corporation\u2019s (FDIC) insurance cap of $250,000.[0]<\/a><\/sup><\/p>\n

The University of Michigan\u2019s consumer sentiment index also fell to 63.4 in March, from 67 last month as inflation expectations remained elevated.[5]<\/a><\/sup> Credit Suisse (CS) shares have had a volatile week after its largest investor announced it would not provide additional funding to the bank.[4]<\/a><\/sup> On Thursday, the stock market had a brief surge after Credit Suisse revealed that it would obtain up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.[4]<\/a><\/sup><\/p>\n

On the data front, bitcoin has gained over 20% in the past nine sessions, to trade at $26,750.50 on Friday, according to CoinDesk data.[6]<\/a><\/sup> On Friday, Bitcoin experienced a 4% increase, bringing its value up to $26,860 and staying near its[6]<\/a><\/sup><\/p>\n

Bill Ackman of Pershing Square has been vocal about his concern for a financial contagion risk spiraling out of control.[7]<\/a><\/sup> He tweeted that spreading the risk of financial contagion to achieve \u201ca false sense of confidence\u201d in First Republic Bank is \u201cbad policy\u201d.[8]<\/a><\/sup> He also said that \u201chours matter\u201d and \u201chalf measures\u201d don\u2019t work in a crisis of confidence.[9]<\/a><\/sup><\/p>\n

0. <\/span>“First Republic sees ‘gob-smacking’ deposit outflows; shares plummet after rescue package” Crain’s New York Business, 17 Mar. 2023, https:\/\/www.crainsnewyork.com\/finance\/first-republic-sees-gob-smacking-deposit-outflows-shares-plummet-after-rescue-package<\/a><\/a><\/p>\n

1. <\/span>“Could First Republic bank collapse trigger a recession?” San Francisco Chronicle, 18 Mar. 2023, https:\/\/www.sfchronicle.com\/tech\/article\/first-republic-bank-collapse-recession-17845950.php<\/a><\/a><\/p>\n

2. <\/span>“FRC Tanks after it Suspends Dividends” TipRanks, 17 Mar. 2023, https:\/\/www.tipranks.com\/news\/frc-tanks-as-it-suspends-dividends<\/a><\/a><\/p>\n

3. <\/span>“From SVB\u2019s sudden collapse to Credit Suisse\u2019s fallout: 8 charts show turbulence in financial markets” MarketWatch, 18 Mar. 2023, https:\/\/www.marketwatch.com\/story\/from-svbs-sudden-collapse-to-credit-suisses-fallout-8-charts-show-turbulence-in-financial-markets-48caa0f3<\/a><\/a><\/p>\n

4. <\/span>“Dow closes nearly 400 points lower on Friday as First Republic and regional banks resume slide: Live updates” CNBC, 17 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/16\/stock-market-today-live-updates.html<\/a><\/a><\/p>\n

5. <\/span>“Markets Dip, Signaling Pause In Rally As Focus Shifts To Next Week’s Fed Decision: Analyst Says Brace For” Benzinga, 17 Mar. 2023, https:\/\/www.benzinga.com\/news\/earnings\/23\/03\/31394507\/nasdaq-s-p-futures-dip-signaling-pause-in-rally-as-focus-shifts-to-next-weeks-fed-decision-analyst<\/a>–<\/a><\/p>\n

6. <\/span>“Bank Stock Crash Deepens: Dow Sinks 400 Points As Top Banks Shed Another $54 Billion” Forbes, 17 Mar. 2023, https:\/\/www.forbes.com\/sites\/dereksaul\/2023\/03\/17\/bank-stock-crash-deepens-dow-sinks-400-points-as-top-banks-shed-another-54-billion\/<\/a><\/a><\/p>\n

7. <\/span>“US banks launch $30bn rescue of First Republic to stem spiraling crisis” The Guardian, 16 Mar. 2023, https:\/\/www.theguardian.com\/business\/2023\/mar\/16\/first-republic-bank-rescued-latest<\/a><\/a><\/p>\n

8. <\/span>“Bill Ackman is \u2018extremely concerned\u2019 about financial contagion risk \u2018spiraling out of control\u2019 after First Republic rescue” Fortune, 17 Mar. 2023, https:\/\/fortune.com\/2023\/03\/17\/bill-ackman-extremely-concerned-financial-contagion-risk-spiraling-out-of-control-first-republic-rescue<\/a><\/a><\/p>\n

9. <\/span>“Ackman says plan to deposit $30B into First Republic is bad policy” Business Insider, 17 Mar. 2023, https:\/\/www.businessinsider.com\/bill-ackman-first-republic-deposit-plan-false-confidence-bad-policy-2023-3<\/a><\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The banking sector has been in turmoil in recent days, with two banks \u2013 Silicon Valley Bank and Signature Bank \u2013 failing after experiencing sudden cash crunches.[0]<\/a><\/sup> This has caused a series of events leading to a $30 billion rescue package for First Republic Bank (FRC) from 11 of the nation\u2019s largest lenders, including JPMorgan (JPM), Citigroup (C), Bank of America (BAC), and Wells Fargo (WFC).[1]<\/a><\/sup><\/p>\n

The rescue package has done little to calm jittery investors, and First Republic\u2019s stock has dropped 32.8% since the announcement on Thursday.[2]<\/a><\/sup> Shares of the SPDR S&P Regional Banking ETF (KRE) have also plummeted 24.5% in the past seven trading days, as analysts fear the depositor-driven panic could slow the economy later this year.[3]<\/a><\/sup><\/p>\n

As depositors have withdrawn an estimated $90 billion from First Republic, the bank also announced it borrowed tens of billions of dollars from the Federal Reserve and the Federal Home Loan Bank over the past week.[4]<\/a><\/sup> First Republic had about $180 billion in deposits heading into this year, 68% of which exceeded the Federal Deposit Insurance Corporation\u2019s (FDIC) insurance cap of $250,000.[0]<\/a><\/sup><\/p>\n

The University of Michigan\u2019s consumer sentiment index also fell to 63.4 in March, from 67 last month as inflation expectations remained elevated.[5]<\/a><\/sup> Credit Suisse (CS) shares have had a volatile week after its largest investor announced it would not provide additional funding to the bank.[4]<\/a><\/sup> On Thursday, the stock market had a brief surge after Credit Suisse revealed that it would obtain up to 50 billion Swiss francs ($54 billion) from the Swiss National Bank.[4]<\/a><\/sup><\/p>\n

On the data front, bitcoin has gained over 20% in the past nine sessions, to trade at $26,750.50 on Friday, according to CoinDesk data.[6]<\/a><\/sup> On Friday, Bitcoin experienced a 4% increase, bringing its value up to $26,860 and staying near its[6]<\/a><\/sup><\/p>\n

Bill Ackman of Pershing Square has been vocal about his concern for a financial contagion risk spiraling out of control.[7]<\/a><\/sup> He tweeted that spreading the risk of financial contagion to achieve \u201ca false sense of confidence\u201d in First Republic Bank is \u201cbad policy\u201d.[8]<\/a><\/sup> He also said that \u201chours matter\u201d and \u201chalf measures\u201d don\u2019t work in a crisis of confidence.[9]<\/a><\/sup><\/p>\n

0. <\/span>“First Republic sees ‘gob-smacking’ deposit outflows; shares plummet after rescue package” Crain’s New York Business, 17 Mar. 2023, https:\/\/www.crainsnewyork.com\/finance\/first-republic-sees-gob-smacking-deposit-outflows-shares-plummet-after-rescue-package<\/a><\/a><\/p>\n

1. <\/span>“Could First Republic bank collapse trigger a recession?” San Francisco Chronicle, 18 Mar. 2023, https:\/\/www.sfchronicle.com\/tech\/article\/first-republic-bank-collapse-recession-17845950.php<\/a><\/a><\/p>\n

2. <\/span>“FRC Tanks after it Suspends Dividends” TipRanks, 17 Mar. 2023, https:\/\/www.tipranks.com\/news\/frc-tanks-as-it-suspends-dividends<\/a><\/a><\/p>\n

3. <\/span>“From SVB\u2019s sudden collapse to Credit Suisse\u2019s fallout: 8 charts show turbulence in financial markets” MarketWatch, 18 Mar. 2023, https:\/\/www.marketwatch.com\/story\/from-svbs-sudden-collapse-to-credit-suisses-fallout-8-charts-show-turbulence-in-financial-markets-48caa0f3<\/a><\/a><\/p>\n

4. <\/span>“Dow closes nearly 400 points lower on Friday as First Republic and regional banks resume slide: Live updates” CNBC, 17 Mar. 2023, https:\/\/www.cnbc.com\/2023\/03\/16\/stock-market-today-live-updates.html<\/a><\/a><\/p>\n

5. <\/span>“Markets Dip, Signaling Pause In Rally As Focus Shifts To Next Week’s Fed Decision: Analyst Says Brace For” Benzinga, 17 Mar. 2023, https:\/\/www.benzinga.com\/news\/earnings\/23\/03\/31394507\/nasdaq-s-p-futures-dip-signaling-pause-in-rally-as-focus-shifts-to-next-weeks-fed-decision-analyst<\/a>–<\/a><\/p>\n

6. <\/span>“Bank Stock Crash Deepens: Dow Sinks 400 Points As Top Banks Shed Another $54 Billion” Forbes, 17 Mar. 2023, https:\/\/www.forbes.com\/sites\/dereksaul\/2023\/03\/17\/bank-stock-crash-deepens-dow-sinks-400-points-as-top-banks-shed-another-54-billion\/<\/a><\/a><\/p>\n

7. <\/span>“US banks launch $30bn rescue of First Republic to stem spiraling crisis” The Guardian, 16 Mar. 2023, https:\/\/www.theguardian.com\/business\/2023\/mar\/16\/first-republic-bank-rescued-latest<\/a><\/a><\/p>\n

8. <\/span>“Bill Ackman is \u2018extremely concerned\u2019 about financial contagion risk \u2018spiraling out of control\u2019 after First Republic rescue” Fortune, 17 Mar. 2023, https:\/\/fortune.com\/2023\/03\/17\/bill-ackman-extremely-concerned-financial-contagion-risk-spiraling-out-of-control-first-republic-rescue<\/a><\/a><\/p>\n

9. <\/span>“Ackman says plan to deposit $30B into First Republic is bad policy” Business Insider, 17 Mar. 2023, https:\/\/www.businessinsider.com\/bill-ackman-first-republic-deposit-plan-false-confidence-bad-policy-2023-3<\/a><\/a><\/p>\n","protected":false},"author":3,"featured_media":2572,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[47],"tags":[],"_links":{"self":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2573"}],"collection":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/comments?post=2573"}],"version-history":[{"count":0,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/posts\/2573\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media\/2572"}],"wp:attachment":[{"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/media?parent=2573"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/categories?post=2573"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/embarrdowns.com\/wp-json\/wp\/v2\/tags?post=2573"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}