Former Goldman Sachs president and Trump adviser says FDIC likely to seize control of First Republic Bank before selling it
Regulators continued their search for a solution to First Republic Bank’s woes over the weekend before stock markets were set to open Monday.
“What will most likely happen is the FDIC will seize control and then simultaneously resell the asset to the successful bidder,” Cohn said. Before Silicon Valley Bank failed, First Republic had a banking franchise that was the envy of most of the industry. Its clients – mostly the rich and powerful – rarely defaulted on their loans. The 72-branch bank has made much of its money making low-cost loans to the rich, which reportedly included Meta Platforms CEO Mark Zuckerberg.
Those fears were crystalized in the bank’s recent quarterly results. The bank said depositors pulled more than $100 billion out of the bank during April’s crisis. San Francisco-based First Republic said that it was only able to stanch the bleeding after a group of large banks stepped in to save it with $30 billion in uninsured deposits.
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