FDIC, Federal Reserve reportedly weighing backstop fund if more banks fail
Mar. 12, 2023 9:18 AM ETFirst Republic Bank (FRC), SBNY, PACW, WALBy: Liz Kiesche, SA News Editor28 Comments
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- The Federal Deposit Insurance Corp. (FDIC) and the Federal Reserve are considering forming a fund that would allow regulators to backstop deposits at banks should more regulated financial institutions run into trouble after Silicon Valley Bank (SIVB) collapsed on Friday, Bloomberg reported, citing people familiar with the matter.
- The regulators have discussed with banking executives a special vehicle with the aim to reassure depositors and help to keep panic from spreading.
- In separate talks, the FDIC asked officials from multiple small- and mid-sized lenders, including First Republic Bank (NYSE:FRC), about their financial situations, Bloomberg reported, citing people with knowledge of the situation.
- On Friday, First Republic (FRC) stock fell as much as 52% amid fear that Silicon Valley Bank's woes would spread to other banks in the tech-focused region.
- At various times on Friday, shares in First Republic (FRC), Western Alliance Bancorporation (NYSE:WAL), PacWest Bancorp (NASDAQ:PACW), and Signature Bank (NASDAQ:SBNY) had been halted.
- Earlier, Silicon Valley Bank CEO sold $3.6B of stock two weeks before bank failed