Many of the institutions that were involved in bailing out First Republic Bank are possibly looking to buy it.
According to Fox Business' Charlie Gasparino and Eleanor Terrett, some of these institutions include Morgan Stanley and PNC Bank, both of which helped raise the $30B to keep First Republic from becoming insolvent.
Spokespersons for both Morgan Stanley and PNC did not comment, while First Republic had no immediate comment.
It is unclear whether any deal will take place, or whether if one does, it would pass regulatory scrutiny from the Biden administration, since antitrust officials in the administration have been suspicious of large mergers, the report indicates.
Regulators of the banking industry are concerned that the nation's biggest banks are getting bigger, however they may also be concerned about the stability of mid-tier banks, such as First Republic, becoming insolvent, according to Fox.
They also believe that mid-sized banks have some of the least diversified asset bases and are prone to losses tied to a higher interest-rate environment, bank runs, or depositors taking money out of their accounts when trouble hits.
Some on Wall Street believe Biden administration banking regulators may approve a merger between First Republic and a big bank.
"In this uncertain environment, big players who have solid funding will be buyers and the weakest will get bought. First Republic is an attractive acquisition for a large advisory firm and regulators would likely approve it," said Chris Whalen, chairman of Whalen Global Advisors in New York.
Fox Business previously reported that banks were preparing to provide First Republic with financing to make it through a "liquidity crisis." First Republic has been under pressure from Fed rate increases, and after the collapse of Silicon Valley Bank, First Republic suffered from massive withdrawals, its bonds were downgraded to junk status, and its stock has fallen over 70% in the last week.
Fear of its collapse encouraged 11 of the largest banks in the country to develop a rescue plan to each put $30B worth of deposits into First Republic. The bailout news caused First Republic's stock to climb almost 10% Thursday. However, there were also discussions about buying First Republic among the same institutions bailing it out.
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