MARCH 25 (Portal) – US authorities are considering expanding an emergency lending facility that would offer banks more support to give First Republic Bank (FRC.N) more time to shore up its balance sheet, Bloomberg News reported on Saturday .
All deliberations are at an early stage, and an expansion of the Federal Reserve’s emergency lending program is one of many considerations by officials to support the defaulting lender, the report said, citing those with knowledge of the situation.
While any changes to the Fed’s liquidity offerings would apply to all eligible users, the adjustments could be designed to ensure First Republic benefits from the changes, Bloomberg said.
Officials from the US Treasury Department, the Federal Deposit Insurance Corporation (FDIC) and First Republic Bank declined to comment. The Federal Reserve did not immediately respond to a Portal request for comment.
US banks requested record amounts of emergency liquidity from the Federal Reserve last month following the collapse of Silicon Valley Bank and Signature Bank.
Earlier this month, US President Joe Biden’s economics team worked with regulators to take measures to support the banking system, including establishing a new facility that would give banks access to emergency funds and make it easier for banks to borrow from banks in emergencies take on the Fed.
Reporting by Rahat Sandhu in Bengaluru Editing by Marguerita Choy and Deepa Babington
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