Shares in troubled US lender First Republic Bank were slightly higher in premarket trading on renewed hopes that a rescue plan could be agreed.
The latest attempt to secure the bank's future is reportedly being led by JP Morgan boss Jamie Dimon.
Dimon, a veteran of previous banking rescues (Bear Stearns and Washington Mutual in 2008), held talks with the chief executives of other major banks about how to shore up First Republic’s finances.
The Wall Street Journal explained: "The discussions, while preliminary, have focused on how the industry could arrange for an investment that would boost the bank’s capital, according to people familiar with the matter."
"Among the options on the table, the people said, is an investment in First Republic by the banks themselves," the report said.
Shares in First Republic were flat in premarket trading in New York on Tuesday.
On Monday shares in the the bank fell after it was hit by a downgrade by credit rating agency S&P which dropped the regional bank from a B+ to a BB- rating (a three-step downgrade) and said that additional downgrades were not out of the question.
S&P noted First Republic’s likely “high liquidity stress” and “substantial outflows” last week, suggesting long-term issues were unlikely to be resolved through a US$30 billion deposit infusion from larger banks.
--Updates share price--