US regulators racing to find a rescuer to buy First Republic Bank

New York, May 1

US regulators are racing to find a rescuer to buy First Republic Bank in a deal that could be announced as soon as Sunday, media reports said.

The Federal Deposit Insurance Corporation, a federal regulator, has reportedly asked six banks to bid for the embattled lender.

Shares in First Republic plunged last week after it admitted customers had withdrawn $100 bn in deposits in March, the BBC reported.

At that time, its competitor Silicon Valley Bank had collapsed, prompting fears of a wider banking crisis.

The SVB's failure was swiftly followed by the demise of another US lender, Signature Bank.

According to reports, the Federal Deposit Insurance Corporation sought bids for First Republic by the end of last week and has been assessing them over the weekend.

Concerns about the global banking industry gathered pace last month as problems at Silicon Valley Bank emerged.

Like Silicon Valley Bank, First Republic is a mid-sized US lender. In March, a group of 11 US banks stepped forward to pump $30bn into First Republic in an attempt to stabilise the business. They included JP Morgan.

However, investors in the bank were rattled last week when First Republic disclosed the amount that depositors had pulled from the lender in March, BBC reported.

First Republic counts wealthy individuals among its clients whose money is potentially at risk if a buyer is not found. In the US, the FDIC insures deposits up to $250,000.

When Silicon Valley Bank and Signature collapsed, the FDIC stepped in to say it would guarantee all deposits to prevent a rush of people trying to get their money out, which is known as a run on a bank, BBC reported.