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Shares of First Republic fell 46% to $12.41 as investors fretted that the $30 billion deposited by several big U.S. banks into the lender would not be enough to ease its troubles.
The banks are considering an investment into First Republic, the WSJ report said, adding that the plan could involve converting some or all of the $30 billion of deposits into a capital infusion.
JPMorgan (NYSE:JPM) and First Republic declined to comment on the report. A spokesperson for First Republic pointed to an earlier statement where the bank said it was “well-positioned to manage short-term deposit activity”.
On Sunday, ratings agency S&P Global (NYSE:SPGI) downgraded First Republic deeper into junk status, citing persistent risks to the lender’s liquidity.
