First Republic Bank shares slide in volatile trading session
Trading in First Republic Bank shares was halted several times on Monday as the financial institution remained jittery even after a $30 billion rescue package.
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First Republic Bank received a $30 billion rescue package from 11 of the largest US banks last week in an effort to prevent its collapse. First Republic Bank has since been downgraded by S&P Global Ratings, which said that while the rescue package should ease near-term liquidity pressures, it may not resolve substantial business, liquidity, funding and profitability challenges , which considers the San Francisco-based bank. Now there is a possibility to face.
Afternoon trading volume had crossed 107 million shares, compared to a daily average of less than 14 million shares. In the most recent trade, the stock was down 31% at $15.98, near its all-time low.
In other news, the bidding process for a successor to the Silicon Valley bank is being extended by the Federal Deposit Insurance Corp. to allow more time to close a potential deal.
The FDIC said Monday that there has been “substantial interest” from multiple parties for Silicon Valley Bridge Bank. The agency said it is going to allow parties to submit separate bids for Silicon Valley Bridge Bank and its subsidiary Silicon Valley Private Bank to simplify the bidding process and expand the pool of potential bidders.
Qualified insured banks and qualified insured banks working with non-bank partners will be able to submit whole bank bids or bids on deposits or assets of the institutions. Banks and non-bank financial firms will be allowed to bid on the asset portfolio.
Bids for Silicon Valley Bridge Bank must be submitted by 8:00 p.m. ET on Friday, while bids for Silicon Valley Private Bank are due at 8:00 p.m. ET. ET on Wednesday
On Friday, the parent of Silicon Valley Bank filed for Chapter 11 bankruptcy protection, and Silicon Valley Bridge Bank was not included in the Chapter 11 filing.
SVB Financial Group is no longer affiliated with Silicon Valley Bank after being seized by the FDIC. Its collapse was the second largest bank failure in US history after the 2008 demise of Washington Mutual.
The shuttering of Silicon Valley Bank and New York-based Signature Bank has brought back bad memories of the financial crisis that plunged the United States into the Great Recession of 2007-2009.
The federal government, committed to restoring public confidence in the banking system, proceeded to protect all bank deposits, even those that exceeded the FDIC’s limit of $250,000 per individual account.
But Credit Suisse shares fell by more than half on Monday to less than a dollar after banking giant UBS said it would step in for measures being taken by regulators to try to stave off further turmoil in the global banking system. will buy its troubled Swiss rival for around $3.25 billion in a deal that went through. ,
The FDIC said late Sunday that New York Community Bank has agreed to buy a significant portion of failed Signature Bank in a $2.7 billion deal.
Despite all the worries revolving around the banking sector, Wall Street is rising on Monday after all the steps are being taken to restore confidence in the banking sector.
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