In the wake of a turbulent period for U.S. banks, the Pennsylvania Department of Banking and Securities has shut down Philadelphia-based Republic First Bank, also known as Republic Bank. The Federal Deposit Insurance Corporation (FDIC) has stepped in as receiver, with Fulton Bank assuming nearly all deposits and assets. Republic First Bank Shuttered as FDIC […]
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Republic First Bank Fails, Triggers Minor Crypto Market Downturn Amid Banking Sector Concerns
The United States witnessed its first banking failure of 2024 with the closure of Philadelphia-based Republic First Bank, creating ripples within the cryptocurrency community as Bitcoin, Ether, and various altcoins experienced slight price drops following the announcement. This event has spurred discussions among crypto enthusiasts and investors, with some seeing bank failures as a compelling […]
Bitcoin News
Bullish Sentiment Surrounds AVAX Price As Republic Adopts Avalanche Blockchain
Tech firm Republic has recently announced its mission to democratize private market investing, with the selection of Avalanche as the platform for launching its profit-sharing digital asset, the Republic Note (R/Note).
The R/Note is a revenue-sharing digital security that is backed by Republic’s private equity portfolio, which includes over 750 assets.
Republic And Avalanche Forge Partnership
According to Republic’s announcement, Avalanche was chosen for several key reasons. Firstly, its scalability and speed ensure that Republic Note holders can enjoy seamless and cost-effective transactions.
Notably, Avalanche has established partnerships with renowned brands like Amazon Web Services and Mastercard, highlighting its technical capabilities.
Additionally, Republic plans to launch a dedicated Subnet on Avalanche next year, offering a purpose-built network specifically designed for the Republic Note.
This will provide enhanced security, privacy, and regulatory compliance, creating a robust digital security environment.
Mission alignment between Republic and Ava Labs, the team behind Avalanche, is another crucial factor. Per the announcement, both entities share a commitment to fostering a more inclusive future for financial markets through tokenization.
Furthermore, Avalanche’s “eco-friendliness” sets it apart from other blockchains, consuming significantly less energy, per the announcement.
The pre-sale of Republic Notes has already attracted participation from thousands of individual retail investors, resulting in pre-sales exceeding million. The public listing of the Republic Note is scheduled for December.
Optimism For AVAX Price
The partnership between Republic and Ava Labs is anticipated to have a positive impact on the AVAX price. The launch of the Republic Note on Avalanche’s platform establishes a strong foundation for expanding its reach to a global audience of investors.
Despite a 5% decline in the past 24 hours, AVAX has outperformed major cryptocurrencies such as Bitcoin (BTC) and Ethereum (ETH), with a 130% rally over the past 30 days, positioning itself as one of the industry’s top performers.
However, it is important to note that AVAX has recently undergone a correction, and its ability to surpass the .64 level will be crucial in determining its prospects amidst the ongoing bullish momentum.
Resistance levels at .59 and .74 have proven challenging for AVAX to breach and consolidate since February 2023.
Overall, the forthcoming launch of the Republic Note on Avalanche’s mainnet is a significant milestone in making the asset accessible to pre-sale participants who have contributed over million.
It remains to be seen whether this partnership can further bolster AVAX’s price and reinforce the positive trend observed over the past 30 days, potentially driving AVAX to new yearly highs in 2023.
The collaboration between Republic and Ava Labs underscores their shared vision of democratizing access to private markets through tokenization.
Featured image from Shutterstock, chart from TradingView.com
SEC Probes First Republic Bank Executives for Insider Trading; Lawmakers Dump Bank’s Shares Before Collapse
After the second largest bank failure in history, the U.S. Securities and Exchange Commission (SEC) is reportedly investigating First Republic Bank executives for allegedly engaging in insider trading. Two sources have claimed that the securities regulator is scrutinizing the bank’s executives for making trades using confidential information. Although the sources have not named any specific individuals under investigation, they assert that the SEC is looking into the matter. Furthermore, reports indicate that U.S. lawmakers sold shares of the troubled bank before it collapsed and was acquired by JPMorgan Chase.
Securities Watchdog Investigates First Republic Execs
On May 1, 2023, the California Department of Financial Protection and Innovation (DFPI) took control of First Republic Bank, a San Francisco-based financial institution, and placed it under the receivership of the Federal Deposit Insurance Corporation (FDIC). With 9 billion in assets, this was the second largest bank failure in U.S. history, following the 2008 collapse of Washington Mutual (Wamu).
In the wake of the First Republic Bank’s collapse, Sabrina Willmer and Austin Weinstein, reporters for Bloomberg, revealed that “two people familiar with the matter” disclosed that the Securities and Exchange Commission (SEC) is investigating the bank’s executives for potential insider trading schemes. This development comes on the heels of the SEC’s investigation into the executives of Silicon Valley Bank, whose failure resulted in the third-largest bank collapse in U.S. history.
According to Willmer and Weinstein, when they reached out to the SEC and JPMorgan Chase for comment on the alleged investigation into First Republic Bank, representatives from both entities “declined” to provide a statement. The sources who disclosed the investigation did not identify any specific executives from First Republic, and the reporters emphasized that no one from the bank has been accused of any misconduct.
U.S. Lawmakers Dump First Republic Shares Prior to Bank’s Failure
In addition to the information provided by Willmer and Weinstein’s sources, several other reports suggest that U.S. lawmakers sold off their shares in First Republic prior to its collapse. During the fallout of First Republic Bank, Florida Democrat Lois Frankel disclosed that she had sold her shares in the bank prior to its collapse and had instead invested in JPMorgan Chase. In an interview with CNN, Frankel explained that her stocks are “managed independently by a money manager who buys and sells stocks at his discretion.”
This isn’t the first time that U.S. officials have been accused of selling off stocks before a market crash. In the midst of the Covid-19 pandemic, several members of the United States Senate were accused of violating the 2012 STOCK Act. However, no charges were filed against the lawmakers and the cases were eventually closed. In a 2022 editorial, the New York Times reported that 97 members of the U.S. Congress had reported trades in companies that were “influenced by their committees.”
What are your thoughts on the recent allegations of insider trading by First Republic Bank executives and the reported sale of shares by U.S. lawmakers prior to the bank’s collapse?
Analysts Warn of More Bank Failures, Possible Recession and Global Repercussions Caused by First Republic Bank Collapse
The recent takeover of First Republic Bank, the fourth U.S. bank to fail this year, has awakened concerns about the possible repercussions this new failure might have on U.S. and international economies. While United States President Joe Biden has assured the public that the banking system remains safe, analysts are warning that this might not be the last bank failure in this period of turmoil.
First Republic Bank Collapse Shows the Weaknesses of the US Banking System, Say Analysts
The recent collapse of First Republic Bank, the second-biggest bank failure in the history of the U.S., has set off the alarm bells of analysts regarding the possible repercussions that this might have on the economy of the country. While President Joe Biden has assured that the banking system is safe, some believe the fourth bank failure in a year might show that the U.S. banking system has systemic weaknesses.
An anonymous investment manager at a Beijing bank told Global Times that this new collapse will likely lead to more banks failing in a future liquidity crunch. He stated:
The takeover indicates the problem is more severe than we first predicted, as we believed the crisis had been eased after the previous bailout.
Jamie Dimon, CEO of JPMorgan, the bank that took over First Republic, declared he believes this “part of the crisis is over.” However, some American analysts think otherwise.
Tomasz Piskorski, a professor at Columbia Business School, believes that other banks could be at risk. He declared:
By our calculations close to 200 other banks can fail, many of which are smaller [than First Republic]. The issues aren’t over.
Federal Reserve Blamed
Several analysts believe that these bank failures have to do with the hawkish policies of the U.S. Federal Reserve, which has been consistently raising interest rates to bring inflation rates down to 2% since last year. About this, Piskorski explained:
There’s hundreds of banks that have the current market value of assets less than the face value of debt, and [the crisis] is mainly caused by the interest rate increase by the Fed.
This might cause the U.S. government to face an unsolvable dilemma, according to Gao Lingyun, of the Chinese Academy of Social Sciences in Beijing. The pickle being having to raise interest rates to lower inflation rates, but affecting the values of the loans made by the banks when these same rates were lower, increasing their risks of defaulting. This, in turn, might contribute to a future recession and other bank failures in more countries, Gao warned.
What do you think about the possible repercussions of the collapse of First Republic Bank? Tell us in the comments section below.
Stabilizing the Banking System: Biden Reassures Public Amid First Republic Bank Collapse, but Warns of National Debt Default
Amid the collapse of the second, third, and fourth largest banks in American history, U.S. president Joe Biden reassured the public that the country’s banking system remains sturdy. However, the president also acknowledged the “threat by the speaker of the House to default on the national debt.”
Biden Expresses Confidence in American Banking System Despite First Republic Bank Collapse
Biden’s recent statements were made following California’s financial regulators seizing First Republic Bank and placing it under the control of the U.S. Federal Deposit Insurance Corporation (FDIC). After the bank’s seizure, it was then sold to JPMorgan Chase, the largest bank in the United States, which pledged to cover all deposits, including the uninsured.
Biden expressed his approval of the government’s handling of the crisis, saying, regulators have taken action to facilitate the sale of First Republic Bank, making sure that all depositors are protected, and “taxpayers are not on the hook.”
“These actions are going to make sure that the banking system is safe and sound,” Biden stated. “And that includes protecting small businesses across the country who need to make payroll for workers and their small businesses.”
The president’s comments echo those made after the fall of Silicon Valley Bank and Signature Bank. U.S. Treasury secretary Janet Yellen also gave similar reassurances when the two banks collapsed, emphasizing the safety and soundness of the banking industry.
However, some have criticized Yellen’s handling of the crisis, with one contributor to the New York Post, Charles Gasparino, labeling her “clueless” for her failure to prevent the collapse of First Republic Bank.
Yellen was “drooling happy talk about the banking system, and asking other banks to bail out the zombie. She’s also doubling down on her mistakes that caused this banking crisis in the first place, making it more difficult to escape,” Gasparino said.
Yellen has sounded an alarm about the U.S. defaulting on its debts, a concern that Biden echoed during his press conference on First Republic’s downfall. On Monday, the president emphasized the need to ensure the continued reliance on the economy and financial system, calling for the “threat by the speaker of the House to default on the national debt” to be taken off the table.
Republican lawmakers, however, have stood firm on the country’s debt limit, demanding repeals of the Inflation Reduction Act before they agree to any increase. The potential default on the country’s debt by the end of the summer has heightened fears of financial instability and a prolonged recession in the United States.
In a note shared with Bitcoin.com News, Ruslan Lienkha, the chief of markets at Youhodler, an international fintech platform based in Switzerland, expounded on the impact of First Republic’s failure on the stability of the U.S. banking sector. Lienkha voiced apprehension that the Fed’s rate hikes that have taken place in the past year have been particularly “painful for small and mid-sized banks in the United States.”
“Which means the collapse of First Republic Bank is likely not the last one,” Lienkha opined. “A potential bankruptcy of the bank could trigger a broader financial crisis in the country, affecting the real estate market and many other related industries—which could have massive implications for the world economy.”
What do you think the government will do to try and prevent another banking crisis and a potential default on the national debt in the future? Share your thoughts in the comments section below.
JPMorgan Chase Assumes Control of First Republic Bank Following Seizure by California Regulators
On May 1, 2023, the California Department of Financial Protection and Innovation (DFPI) seized First Republic Bank, placing it into Federal Deposit Insurance Corporation (FDIC) receivership. According to reports, this move came after the bank’s financial troubles made it insolvent and unable to meet its obligations. Following the seizure, JPMorgan Chase submitted the winning bid to assume control of First Republic Bank’s deposits, including uninsured deposits.
California Regulator Seizes First Republic, JPMorgan Takes Over Bank’s Assets
From the first week of March, four major banks — Silvergate Bank, Silicon Valley Bank, Signature Bank, and First Republic Bank — have failed. The failures of the latter three banks are said to be the largest in American history, since the collapse of Washington Mutual (Wamu) in 2008.
Last week, all eyes were on First Republic Bank as it made a last-ditch effort to receive assistance from the private sector. This came after customers withdrew 0 billion from the bank last month, which led to concerns over the bank’s solvency. On Monday, May 1, the California Department of Financial Protection and Innovation (DFPI) announced that it had seized First Republic Bank and placed it under the control of the Federal Deposit Insurance Corporation (FDIC).
“The DFPI took action pursuant to California Financial Code section 592, subdivisions (b) and (c), specifically ‘conducting its business in an unsafe or unsound manner’ and being in a ‘condition that … is unsafe or unsound’ to transact banking business,” the California regulator detailed. In addition, the financial regulator announced that JPMorgan Chase, a banking giant, has been awarded the bid for First Republic Bank following its placement into receivership under the Federal Deposit Insurance Corporation (FDIC).
On Monday, JPMorgan Chase announced in a press release that it had taken over First Republic Bank. The bank highlighted its “significant strength and execution capabilities” and stated that it was committed to supporting the U.S. financial system. As part of the purchase, JPMorgan Chase has assumed responsibility for all deposits, including those that were uninsured. The move is expected to bring stability and assurance to customers who had deposits with First Republic Bank. JPMorgan Chase has also revealed that the bank will be operated by Marianne Lake and Jennifer Piepszak, two of its community banking executives.
Since the fall of Wamu, the collapse of First Republic Bank is now the second-largest bank failure in the United States. In terms of the size of insolvency, it is followed by the collapses of Silicon Valley Bank and Signature Bank. On Monday, JPMorgan Chase announced that it would be hosting a conference to discuss the transaction at 8:30 a.m. Eastern Time. The takeover by JPMorgan Chase is expected to bring about changes in the banking landscape, given that it is the largest bank in the United States.
What do you think the collapse of several major banks, including First Republic Bank, means for the future of the U.S. financial system? Share your thoughts in the comments section below.
First Republic Bank Faces Potential Takeover by FDIC Amidst Financial Struggles
According to multiple reports, First Republic Bank is facing significant financial difficulties and could be taken over by the Federal Deposit Insurance Corporation (FDIC) if private sector banks do not intervene. The FDIC has reportedly approached several large commercial banks regarding purchasing First Republic after the bank’s stocks dropped more than 50% on Friday.
FDIC Considers Taking Over First Republic Bank as Financial Troubles Deepen, Urges Private Sector to Step In
First Republic Bank’s shares were halted multiple times on the New York Stock Exchange this week, with the stock slipping 50% lower on Friday to an intraday low of .98 per share. By the end of the Friday trading session, it had fallen over 43% to .51 per share. According to sources cited by CNBC, “the most likely outcome for the troubled bank is for the Federal Deposit Insurance Corporation to take it into receivership.”
However, the bank is still hoping for an alternative solution to a government takeover. The FDIC is reportedly seeking larger banks to step in and assist the troubled lender, with JPMorgan Chase and PNC Bank said to be interested in bidding on First Republic Bank after the FDIC takeover. Both banks have already provided billion to prop up First Republic following the collapse of three major U.S. banks in March.
First Republic Bank held a significant amount of uninsured deposits and offered low-interest mortgages to clients. However, following a considerable hike in rates by the Fed over the past year, those mortgages are not generating revenue. Last week, the bank revealed that 0 billion in uninsured deposits had been removed from its coffers. Like Silicon Valley Bank and Signature Bank, First Republic did not prepare for the rising interest rates and relied heavily on uninsured deposits from high-net-worth individuals and their businesses.
What do you think about the FDIC potentially taking over First Republic Bank after seizing two major banks last month? Let us know what you think about this subject in the comments section below.
US Government in Talks to Rescue Struggling First Republic Bank, Sources Say
Sources have revealed that U.S. government officials are in talks to rescue First Republic Bank, a struggling financial institution. The discussions involve the U.S. Treasury, the Federal Deposit Insurance Corporation (FDIC), and the Federal Reserve, according to reports on Friday.
Private-Sector Deal Preferred as U.S. Government Officials Discuss First Republic Bank Rescue Efforts
Market observers have been keeping a close eye on First Republic Bank since the collapse of three major banks in March. The bank disclosed earlier this month that it experienced 0 billion in withdrawals by customers in March, following the collapse of Silvergate Bank, Silicon Valley Bank, and Signature Bank. Additionally, 11 banks injected billion into First Republic Bank to strengthen its reserves.
On Friday, Reuters reported that the U.S. government is coordinating with the bank’s advisers to possibly save First Republic Bank, as talks led by the advisers have yet to reach a deal in the private-sector. This development comes after rumors emerged three days earlier that the bank would enter federal receivership. According to Reuters reporters Nupur Anand, Andrea Shalal, and Greg Roumeliotis, three sources familiar with the situation say:
U.S. officials are coordinating urgent talks to rescue First Republic Bank.
The Reuters report notes that two sources have revealed that executives from First Republic Bank are actively searching for a rescue deal, and U.S. officials are of the opinion that a private-sector agreement would be “preferable.” The collapse of First Republic Bank, the 14th largest bank in the U.S., could lead to further contagion in the banking sector. Moreover, the U.S. central bank is set to release a post-mortem on Silicon Valley Bank this afternoon.
“We are engaged in discussions with multiple parties about our strategic options while continuing to serve our clients,” First Republic said in a statement to Reuters.
What do you think the potential impact of a First Republic Bank collapse would be on the broader banking sector? Share your thoughts about this subject in the comments section below.
US Banking Industry Still Struggling as First Republic Bank Shares Plummet by Over 30%
In the midst of a tumultuous week, First Republic Bank is struggling to regain its footing in the financial world. Reports have surfaced that the bank is poised to enter government receivership due to a massive outflow of 0 billion in customer withdrawals last month. This has prompted investors to flee the bank, causing its shares to dive-bomb by over 50% on Tuesday.
Shares From America’s 14th Largest Bank Decimated Over the Last Two Days
The situation only worsened as pre-market trading began, and by 11:00 a.m. on Wednesday, First Republic Bank’s shares had fallen by over 30%. The decline in market capitalization has been a major concern for investors, who are increasingly worried about the bank’s stability and future prospects.
SCOOP (1/2): Bankers working w @firstrepublic bank say they expect eventual govt receivership for the ailing bank after it exhausts private sector solutions such as asset sales and finding a buyer, both of which appear difficult. Officials at the big banks believed the Feds were
— Charles Gasparino (@CGasparino) April 25, 2023
Sources close to the matter have indicated that the banks which injected billion into First Republic Bank may need to step in and provide additional assistance. Advisors to the banks have stated that failure to do so would result in a greater cost down the line. It is expected that the advisors to First Republic Bank will make a plea to the larger U.S. banks to provide further support.
The troubled bank has already taken significant steps to address its financial challenges, including the sale of assets and a significant reduction in its workforce, with 7,200 employees being laid off. However, it remains to be seen if these measures will be sufficient to restore investor confidence and ensure the bank’s long-term viability.
The only question remaining about First Republic Bank $FRC is whether or not they make it to Friday when banks are usually closed by the FDIC.pic.twitter.com/wGTYC2mYwi
— Wall Street Silver (@WallStreetSilv) April 25, 2023
The banks’ advisors reportedly disclosed that if they are not helped, the system will “pay more later when it fails,” according to CNBC. “Advisors to First Republic will attempt to cajole the big U.S. banks who’ve already propped it up into doing one more favor,” CNBC’s Hugh Son reported. Others have blamed a specific demographic of First Republic Bank’s customers for its downfall.
“Wealthy clientele such as the affluent individuals that banked at [First Republic] have no loyalty to any particular financial adviser,” Chris Whalen, chairman of Whalen Global Advisors, stated in a note received by CBS News. “First Republic was one of many advisers and service providers to their wealthy customers, people who find products like interest-only mortgages attractive,” Whalen added.
After dropping more than 30% on Wednesday, First Republic Bank’s shares managed to rise and currently, the stock is down between 21% to 26% after the rebound. Still, there’s another half day of Wall Street trading and First Republic Bank stock will be watched closely. Reports further detail that the bank’s stocks were halted due to volatility this afternoon.
What do you think the future holds for First Republic Bank, and do you believe that the steps taken by the bank thus far will be enough to restore investor confidence? Share your thoughts in the comments below.