Shares of First Republic Bank slumped 13.1% on Monday, after a report the regional bank could raise more money fanned worries about its liquidity despite a $30 billion rescue last week.
Global bank stocks and bonds also came under pressure after UBS Group sealed a state-backed takeover of troubled peer Credit Suisse Group AG. The deal involved a hit to some Credit Suisse bondholders.
"Even though First Republic Bank says that they have the financial backing to survive, investors are concerned that they too will have to be taken over," said Jason Pride, chief investment officer of private wealth at Glenmede. San Francisco-based First Republic is in talks to raise capital from other banks or private equity firms by issuing new shares and could also negotiate a deal to be sold, theOn Sunday, Reuters reported that the lender was still trying to put together a capital raise but that no deal was imminent.
First Republic's shares have lost 80% of their value over the past seven sessions on fears of a bank run as a large proportion of the lender's deposits are uninsured. Other regional lenders largely rebounded after last week's sharp falls. The S&P 1500 regional banks index
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