Wall Street leaders and U.S. officials discussing an intervention at First Republic Bank are exploring the possibility of government backing to encourage a deal to shore up the lender, people with knowledge of the situation said, as shares in the bank plummeted in post-market trading.
The group has floated a variety of measures to make the company more attractive to potential investors or a buyer as part of efforts to ensure there isn’t another U.S. bank failure, added the people, who asked not to be named after describing confidential talks.
Among various options, the government could play a role in lifting out assets currently eroding First Republic’s balance sheet. While investors have expressed interest in helping, the firm’s unrealized losses have been a sticking point so far. Additional ideas have included offering liability protection, applying capital rules more flexibly or easing limits on ownership stakes, the people said.