Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
The Mujahideen Movement: The two were killed along with dozens of others from their family in a cowardly Zionist assassination that targeted the Sabra neighborhood today
The Palestinian Mujahideen Movement mourns the martyrdom of its Secretary-General, Asaad Attiya Abu Sharia "Abu Al-Sheikh", along with his brother Ahmad
Abu Zaid: I believe that the Iranian operation was multi-layered, combining cyber and electronic attacks with coordinated on-the-ground infiltrations by agents
Abu Zaid: Usually, archives of such sensitivity are typically protected by a full-scale security system, but it appears that Iranian intelligence managed to make use of a gap in it
Strategic military expert Nidal Abu Zaid: Iran has stripped "Israel" of the superiority and deterrence long boasted by its security minister, chief of staff, and other top officials
Fallahpour: Iran may use these documents in its battle with the United States and Western countries over its nuclear program
Fallahpour: Iran may have obtained additional documents related to "Israel's" regional projects, not just its nuclear program
Fallahpour: The coming weeks will be full of surprises, as Iran has forced Israeli intelligence agencies into a state of psychological exhaustion
Al Mayadeen's correspondent in Tehran, Siavash Fallahpour: Iran has redefined the concept of deterrence, shifting it away from traditional military balance toward a new strategic framework
Sources to Al Mayadeen: Number of documents so great that merely studying them, along with accompanying images and footage will require a great deal of time.

US bank crash saga continues, First Republic shares collapse

  • By Al Mayadeen English
  • Source: Agencies
  • 29 Apr 2023 14:35
  • 1 Shares
4 Min Read

The market is closely monitoring the government's reaction to the crisis hitting the financial sector.

  • x
  • US bank crash rally continues, First Republic shares collapse
    A view of a First Republic Bank location in New York City (Reuters)

The US banking system continues to raise concerns after shares of First Republic plummeted over 50% on Friday as the bank's first quarter reports on Monday revealed that over $100 billion of deposits were withdrawn over customer fears.

First Republic closed the day at $3.51 down 43 percent, rebounding 7% of losses after trading of shares was paused several times due to extreme volatility.

On November 2021, the bank capital was more than $40 billion, while now it's worth only around $654.

Going into reverse from its peak days in November 2021 when it had a market capitalization of more than $40 billion, the bank now is worth only about $654 million.

Read more: Moody's cuts US banking sector view to negative after banks collapse

The Monday statement also mentioned that the issue of the deposits was stabilized after a consortium of 11 US private banks injected a $30 billion capital in the bank in mid-March and that the First Republic is "pursuing strategic options."

Despite reports of the potential bailout by other banks, so far they remain just reports.

The First Republic is the latest in a series of bank crashes the United States has been witnessing lately.

Following the collapse of Silicon Valley Bank (SVB), New York's Signature Bank, and Silvergate Bank, which marked a historic failure in the US banking system, many have attributed the collapses to soaring interest rates.

The Federal Reserve called on Friday for further imposing strict supervision of banks during a review of the collapse of SVB.

While recent earning reports of mid-sized banks saw a drop in profit forecast as tighter policies are expected to be introduced soon, some market specialists claimed that the financial reports are reassuring.

Related News

S&P downgrades US banks credit ratings, shares drop

US Treasury's Adeyemo: Recession looming if US defaults on debt

Read more: US to intervene in the market to counteract non-bank financial firms

According to CFRA Research analyst Alexander Yokum, the most probable coming scenario includes the sale of the First Republic after the Federal Deposit Insurance Corporation (FDIC) puts its hands on it or selling its assets to other financial firms.

But both scenarios would be faced with a common problem, which is the negative values of the bank's loans, that might affect the interest of prospective buyers due to the loss of value.

"Maybe the government will come up with some interesting way to make it enticing," Yokum said.

Action dilemma

So far, it is still unclear what steps the US government would take.

In normal cases, the Fed only covers depositors up to 250,000 in small and mid-sized banks. 

But following the bank collapses last March, the Fed and FDIC decided to guarantee deposits that exceed the $250,000 mark in attempts to fight contagion fear across the banking sector.

However, former FDIC Chair Sheila Blair said the government's "ill-advisedly created an expectation that for any future bank failures, uninsured deposits would be protected."

Read more: US capitalism is ‘breaking down before our eyes’: Griffin

Nonetheless, if the government did not take this action this time, "I do worry that that's going to surprise people and could be disruptive," she added.

Morningstar analyst Eric Compton deemed that First Republic's prospects have dropped since Monday, while the latest numbers only skyrocketed deposit flight.

"At this point, we feel that there is a material probability that the bank does not make it, and even if First Republic does survive, we think that the dilution of existing shareholders that would be required to resize the balance sheet would get current shareholders close to $0 as well." 

In March, former Lehman Brothers executive Lawrence McDonald revealed that 50 more US bank collapses could be underway if the US government does not address structural issues.

  • US Banks
  • United States
  • US
  • First Republic
  • Signature Bank
  • SVB
  • Silvergate

Most Read

Lebanon's PM Nawaf Salam meets with US envoy Morgan Ortagus in Beirut on April 5, 2025 (Dalati Nohra via AP)AP)

Morgan Ortagus to exit US role in Lebanon amid policy shift

  • Politics
  • 1 Jun 2025
A Palestinian woman mourns as she embraces the body of her daughter Mayar Abu Odeh, 8, who was killed in an Israeli army strike on Gaza. at Al-Shifa Hospital in Gaza City, Wednesday, June 4, 2025. (AP)

French port workers block arms shipment to 'Israel' amid Gaza genocide

  • Politics
  • 4 Jun 2025
New Syrian group claims Golan strike, vows resistance to 'Israel'

New Syrian group claims Golan strike, vows resistance to 'Israel'

  • Politics
  • 4 Jun 2025
Palestinians struggle to get donated food at a community kitchen in Khan Younis, southern Gaza Strip, Monday, June 2, 2025. (AP)

Boston Consulting Group withdraws from GHF

  • Palestine
  • 3 Jun 2025

Coverage

All
War on Gaza

Read Next

All
https://english.almayadeen.net/news/politics/pentagon-chief--nato-likely-to-back-trump-s-5--defence-spend
Politics

Europe spent $3 trillion on defense, but got little in return - FT

Power, parties, and scandal: Trump’s ties to Epstein: Telegraph
Europe

Power, parties, and scandal: Trump’s ties to Epstein - The Telegraph

Eilat port as seen from the sea, occupied Palestine, March 12 2009 (wikimedia commons)
Politics

YAF operations forced 80% plunge in Eilat port revenues in 2024

EU backs International Criminal Court after US sanctions judges
Europe

EU backs International Criminal Court after US sanctions judges

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS