On April 27, the FDIC had been giving JPMorgan Chase time to strike a private deal with First Republic to shore up First Republic’s finances.
But as weeks passed without a deal between the two banks, top FDIC officials began to consider whether to downgrade their ratings on First Republic’s health, including Camel’s, according to people with direct knowledge of the talks. rating.
That could limit the bank’s use of the Fed’s discount window and a rescue facility it rolled out last month, the people said.
The FDIC has yet to make a decision, and officials have not warned First Republic about their thinking while they wait for First Republic administrators to improve its balance sheet.