Wall Street: First Republic Bank suffers a setback

Thud on Wall Street for First Republic Bank. The start was quickly thwarted in a highly volatile session with investors concerned about the banking crisis. After early trading, the Dow Jones index advanced 0.39% to 31,987 points, the S&P 500 index rose 0.20% to 3,924 and the Nasdaq fell 0.25% to 11,600. In the end, the stock lost 18% despite the injection of deposits worth 30 billion dollars provided by a pool of 11 of the major US banks.

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First Republic Bank’s slump, however, has its roots far away. It is the fourteenth largest US bank by activity and is based in San Francisco. He sees his stock market valuation plummeting starting March 9. Its stock plummets the following week. On March 16, Wall Street giants, including JP Morgan, Bank of America and Citigroup, pledge to deposit $30 billion into the lender. But despite the bailout package, rating agency Standard & Poor’s downgraded the bank’s long-term credit rating from BB+ to B+ on Sunday, March 19. The agency warns it will lower it further if there is no progress on stabilizing deposits. First Republic Bank assures that, with the injection of 30 billion dollars, the lender is “well positioned to handle the short-term deposit business”.

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