First Republic just got a $30 billion lifeline from JPMorgan and other Wall Street giants. Here's why its problems aren't over.
The deposit infusion isn't a panacea for all the bank's problems, Tim Coffey, managing director at Janney, told Insider. And how regulators react to the demise of SVB could force banks to raise billions more in capital.
First Republic hasn't disclosed the extent of its deposit outflows. It's unclear if today's news will be enough to convince depositors to come back to the bank. The $70 billion lifeline from JPMorgan announced on Sunday did little to quell investors' concerns, Dahiya noted.Does First Republic have to resort to a sale?. The deposit infusion has bought the bank some time, but if the stock continues to plummet, the bank has few options, according to Dahiya.
"I'm a little bit hesitant to say JPMorgan will come through," he said."I think JPMorgan feels they were not loved last time when they bought all those banks." JPMorgan CEO Jamie Dimon has expressedabout rescuing Bear Stearns amid the financial crisis in 2008. It also bought the biggest bank to ever fail, Washington Mutual later that year.
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