(AOF) – The bank in difficulty, First Republic Bank, which jumped by almost 30% yesterday, is expected to decline by 4%. Wall Street executives and U.S. officials discussing an intervention for First Republic Bank are considering the possibility of government support to encourage a deal, Bloomberg reported, citing people familiar with the matter.
JPMorgan Chase chief executive Jamie Dimon has drawn up a new plan under which some or all of the $30 billion in deposits injected by a group of US banks would be converted into a capital injection for the California establishment, Bloomberg claimed yesterday. .
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The negative effects of rising interest rates
The rise in interest rates normally causes an increase in bank income through the loans granted. In Europe, according to a survey conducted by S&P among 85 banking establishments, the sector expects an average increase of 18% in its net interest income. However, this new inflationary context also has undesirable effects, in particular an increase in refinancing costs. It is also accompanied by the fear of a new recession, which would then affect all the bank’s businesses, ranging from loans to asset management, whose income is correlated to market valuations. Reassuring element: the banks of the euro zone are sufficiently solid to face a deterioration of their environment.