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First Republic Bank exposed to additional risk

However bank run is unlikely, experts say

27.Mar.23 10:27 AM
By Shawn Highstraw
Photo CNN


First Republic Bank exposed to additional risk
The US banking crisis is still in full swing, and in the framework of it, the authorities are considering expanding credit lines for banks. That could, in theory, give First Republic Bank time to gather a buffer and bail itself out. On March 26, Bloomberg, based on anonymous sources, claims that in the United States they are thinking out loud about what to do with the problem, in particular in the form of First Republic Bank.

One option currently being considered is to expand facilities at the Federal Reserve, the U.S. central bank. First Republic was initially identified as a bank that was stable enough to continue to operate without immediate support from the authorities.

If it is chosen to expand the facilities at the Federal Reserve, then the idea is to make it applicable to all banks. The measures would therefore not be aimed at a selective group of banks, which was initially criticized quite a lot.

In the United States, it was feared that only the somewhat larger banks would be eligible for help, which could put the smaller and regional banks in trouble. After all, if customers of those banks realize that their funds are not safe there, but with the bigger guys they are, then the choice for a switch is of course made quickly.

Although the authorities believe that First Republic is indeed facing structural problems in terms of financial management, they do not see the same risk there as with Silicon Valley Bank. In the case of the latter bank, the customers panicked and decided en masse to withdraw their funds from there, as a result of which the bank fell over.

"First Republic has cash to honor customers' withdrawal requests, the sources report. This includes the $ 30 billion deposited by America's biggest banks this month.

So it seems that the banking crisis in the United States is not over yet and that an exciting period is coming for the entire financial industry. Could this then mean the definitive breakthrough for bitcoin (BTC) as an alternative asset? We may learn that in the coming months.

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