The sources told Reuters that the Federal Deposit Insurance Corporation, the Treasury Department and the U.S. Federal Reserve Board are among government agencies that recently began arranging meetings with financial firms to rescue the troubled bank.
One of the sources said that although the government has been communicating with the bank and its advisers for weeks, its recent involvement in drawing up a rescue plan for the bank will lead to buy-in from other parties, including banks and private equity firms, for the negotiating table.
It is unclear whether the US government plans to participate in a private sector bailout for the First Republic.
One of the sources said the government’s involvement had emboldened bank executives as they raced to reach a deal that would prevent a takeover by US regulators.
The First Republic became the epicenter of a banking crisis in the United States in March after its wealthy customers began withdrawing deposits, leaving it reeling.
Shares of the bank rose 3.8% on Friday, after Reuters reported the US government was coordinating talks to save the bank.
Two sources said U.S. officials believe the private sector needs to reach a deal to save the bank better than forcing it into receivership by the Federal Deposit Insurance Corporation.
Trading in shares of the bank “First Republic” was suspended after falling during Friday’s session by more than 41.6% to the level of 3.61 dollars.
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