First Republic Bank shares rocketed on Tuesday after the Wall Street Journal reported that JPMorgan Chase CEO Jamie Dimon is leading discussions with other bank chiefs about a rescue plan for the bank.
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.
Investors reacted to the news, sending shares of First Republic Bank up nearly 38.3% to $16.85 in morning trade.
Meanwhile, the SPDR S&P Regional Banking ETF gained 5%, following a 29% slide in March so far.
Contact the author Uttara Choudhury at uttara@proactiveinvestors.com
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