JPMorgan Chase and Morgan Stanley in talks to save First Republic Bank
JP Morgan and Morgan Stanley are amongst several other behemoth banks in talks with First Republic Bank about a possible plan to rescue the California lender.
According to Bloomberg, a full takeover of the bank is still possible but unlikely, however there are several other options on the table.
On Thursday, First Republic’s stock plummeted by 36 per cent, following the regulators’ seizure of fellow regional lenders Silicon Valley Bank and Signature Bank over the past week.
The San Francisco bank has been working with JPMorgan as it works through its issues.
On Sunday, the same day Signature Bank was taken over by regulators, First Republic said it had “further enhanced and diversified its financial position” by securing additional liquidity from the Federal Reserve and JPMorgan.
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Meanwhile London’s top shares faced a rollercoaster session on Thursday, with traders sending the FTSE 100 up and down throughout the day, but despite turbulent trading it managed to close on a high.
Coming off the index’s worst day for three years on Wednesday, amid worries over the future of banking giant Credit Suisse, Thursday trading was highly erratic.
The top tier index initially gained ground, looking set for a rebound as trading opened after Swiss authorities extended a £45 billion emergency loan to the under-pressure bank.
But through the day it was knocked around like a yo-yo, at one point even dipping into negative territory. By the end of the day it had gained 0.9%.
The deepening crisis at Credit Suisse, just days after Silicon Valley Bank and Signature Bank collapsed in the US, has sparked fears the banking sector is heading for a full-blown crisis.
Credit Suisse said it will borrow up to 50 billion Swiss francs (£45 billion) from Switzerland’s central bank to bolster its finances.
The loan was intended to boost its liquidity and calm investors a day after the bank’s share price plummeted by 24%.
But its shares rose by about 19% in Zurich and the wider markets bounced back as European and US indexes regained some, but far from all, of the ground they had lost on Wednesday.
But experts said the rebound was “underwhelming” and markets will remain volatile.
Chancellor Jeremy Hunt said he welcomes efforts to boost the liquidity of Credit Suisse.
He told Times Radio: “I monitor what is going on in the markets, the Bank of England governor monitors carefully what is going on, he keeps me informed.
“I think the news we have heard from the Swiss authorities overnight is welcome.”
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