<\/p>\n
United States authorities are reportedly deliberating on “expanding” an emergency credit line for banks, which may provide First Republic Bank a time buffer to address balance sheet concerns, according to people familiar with the situation.<\/p>\n
In a March 26 Bloomberg report citing unnamed sources, it was reported that U.S. officials are ruminating on what support, “if any,” can be provided to First Republic, however an \u201cexpansion of the Federal Reserve\u2019s offering\u201d is one of the options being explored.<\/p>\n
First Republic was reportedly deemed \u201cstable enough to operate\u201d by regulators without the need for an \u201cimmediate intervention,\u201d as efforts are made by the bank in the meantime to \u201cshore up its balance sheet.\u201d<\/p>\n
The sources noted that while the Fed\u2019s liquidity offerings would be reportedly expanded in accordance with banking law, which stipulates that it must be \u201cbroadly based\u201d and not aimed at benefiting a specific bank, they also warned that the alteration could be \u201cmade in a way\u201d that ensures First Republic Bank benefits.<\/p>\n
Related:<\/em><\/strong> <\/em><\/strong>Let First Republic and Credit Suisse burn<\/em><\/strong><\/p>\n It was reported that despite First Republic facing structural challenges with its balance sheet, “the bank’s deposits are stabilizing\u201d and is not at risk of experiencing \u201cthe kind of sudden, severe run\u201d that led regulators to close down Silicon Valley Bank. It noted:<\/p>\n \u201cIt has cash to meet client needs while it explores solutions, the people said. That includes $30 billion deposited by the nation\u2019s largest banks this month.\u201d<\/p><\/blockquote>\n This comes after the Fed announced a plan on March 19 to strengthen liquidity conditions through \u201cswap lines,”\u00a0which involve an agreement between two central banks to exchange currencies.<\/p>\n Coordinated central bank action to enhance the provision of U.S. dollar liquidity: https:\/\/t.co\/Qs4cYY8BFO<\/p>\n\n