First Republic Bank Stock Bounces Back: What's Going On?

First Republic Bank FRC shares are trading higher Tuesday following reports suggesting JP Morgan Chase & Co JPM CEO Jamie Dimon is leading discussions to come up with a new rescue plan for the bank.Treasury Secretary Janet Yellen also said the government is prepared to take more action to aid banks, which could be positively impacting the stock.

What To Know: According to a Wall Street Journal report, Dimon is leading talks with other executives from big banks in an effort to figure out how to stabilize First Republic.

The talks are reportedly centered around ways the banking industry could help strengthen the troubled bank's capital position. It's possible the banks could invest in First Republic themselves, according to people familiar with the matter.

The Treasury Secretary also said on Tuesday the government is prepared to provide guaranteed deposits if contagion in the banking system worsens. 

"Our intervention was necessary to protect the broader U.S. banking system,” Yellen said, referencing recent government actions.

"And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.”

The news comes after First Republic stock traded significantly lower on Monday amid continued uncertainty surrounding the fate of the bank. 

Following the collapse of SVB Financial Group SIVB and Signature Bank SBNY, several banks experienced elevated net deposit outflows and it seems First Republic was impacted the most.

From Monday: First Republic Stock Falls As Fate Of The Bank Remains Unclear

Late last week, the bank announced a deal for $30 billion in deposits from several major banks and said it has decided to suspend its dividend. 

Many hoped that the $30 billion would be enough to restore confidence, but CNBC's David Faber on Monday noted that it's not clear if it worked.

"I continue to talk to many people who believe this company needs to be sold and they question, in fact, whether or not it can be without government help," Faber said on CNBC's "Squawk On The Street."

FRC Price Action: FRC shares fell on Monday adding to more than 90% declines just this month. The stock is bouncing back Tuesday and was last up 31.2% at $16.03, according to Benzinga Pro.

Photo via Shutterstock.

Market News and Data brought to you by Benzinga APIs
Comments
Loading...
Posted In: NewsMoversJamie DimonJanet YellenWall Street Journalwhy it's moving
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!

Loading...