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00:00Indices are up first, the public, though. Those shares in shares still slumping, getting two downgrades from S & P just over the past week. Joining us now for more is Herman Chan, a Bloomberg intelligence. I mean, why is this situation that was all yet? Yes, we were probably going to expect something this week. And that was my initial view. Listening to the news reports over the weekend, it does sound like First Republic's management is trying to make a go of it. I would take a step back and reiterate the fact that First Republic has done everything right throughout its entire career. Its credit quality is pristine, doesn't lose money in terms of its loan portfolio, well thought of within the industry from analysts and investors. And they've unfortunate been been pulled into this vortex that we're in with folks really focused on funding and duration mismatch and asset liability management. I think if I were in management's shoes, you'd look at the fact that the largest banks in the U.S., in conjunction with the Federal Reserve, have injected 30 billion dollars in deposits to help those who have a short term bridge to the effect that potentially management can figure out a way to resolve this issue. And so we're just in a wait and see mode. If we were to see a short term guarantee of deposits, Herman, would that provide a bridge to solve the problem that this institution faces? Is that probably the best way out of this? I think so. You've seen the the announcement from the mid-sized banks over the weekend where they were advocating for a short term guarantee of about two years for the regulators to make this action. It would help calm markets, calm the jittery depositors, and I think really instill some confidence that eventually, you know, cooler heads can prevail. If who should come in and look at First Republic public like someone you say the fundamentals are OK. Right. The market not behaving like that. Right. Who should come in and buy the bank or buy the parts of it and why hasn't happened yet. REITs, in our view, first republics are really attractive franchise. It has over two billion dollars in wealth management assets. And as you know, those fees are sticky and don't go don't fluctuate by the whims of the markets or interest rates. So those are really sticky fees that I think would be attractive to a lot of potential buyers. It does sound like the regulators would prefer a larger regional to be involved. And so we've we've heard from from various news articles that banks like PNC are interested and have taken a look. So there there's some possibilities there which I think would make for an orderly resolution. What are your thoughts on the bank signature deal? Democracies have responded very positively to that. Yeah, I think it just injects a another sense of confidence that the banks fail. This is part of what happens in a capitalist society, but there's always going to be another bank that will step in and absorb the remaining failed institutions. So you see that with New York community, it's a great deal for a New York community. Their shareholders and their management team injects a lot of lower cost deposits and improves the New York community's funding structure, which has certainly has been the knock on them. So it's a win win for the FDIC, for New York community and their shareholders. So great deal all around.

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First Republic Shares Hit All-Time Intraday Low

Even though most regional bank shares rallied Monday, First Republic Bank is having trouble. Shares hit an all-time intraday low. Herman Chan of Bloomberg Intelligence explains. (Source: Bloomberg)

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