The FDIC is reportedly planning to take over First Republic Bank shortly. According to a report from Reuters, there is not enough time for the bank to seek a private-sector rescue before this happens. This news comes after months of speculation about the fate of First Republic Bank and its ability to stay afloat amid economic turmoil caused by COVID-19.
The FDIC has stated that it will be taking control of all operations at First Republic Bank to protect customers’ deposits and ensure that they can get their money back safely. The agency also noted that it will work with local authorities on an orderly transition process. Hence, so as not to disrupt any services or cause unnecessary disruption for customers during this difficult period.
This takeover marks yet another sign of how much damage COVID-19 has done on businesses across different sectors, including banking and finance institutions like First Republic Bank who have been struggling since March 2020 when lockdowns were first put into place around the world due to pandemic concerns. It remains unclear what plans are being made regarding other banks facing similar issues but one thing is certain. These unprecedented times require swift action from government agencies, such as the FDIC, if financial stability is going to be maintained throughout 2021 and beyond.
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