After UBS acquired Credit Suisse and close to a dozen financial institutions injected $30 billion into First Republic Bank four days ago, S&P Global downgraded First Republic’s shares to junk status on Sunday. Investors are concerned that the cash infusion from 11 major financial institutions may not address the bank’s liquidity issues. First Republic’s shares fell more than 15% on Monday morning when Wall Street opened and by 1:15 p.m. (ET), the stock was down more than 25%.

First Republic Bank Shares Slide 25% Lower Despite $30B Cash Infusion From 11 Lenders Last Week

At around 1:15 p.m. Eastern Time on Monday, March 20, 2023, shares of San Francisco-based First Republic Bank (NYSE: FRC) were down more than 25% against the U.S. dollar. The commercial bank and wealth management services provider recently received $30 billion from 11 major banks, including Bank of America, Citigroup, Goldman Sachs, JPMorgan Chase, Morgan Stanley, Wells Fargo, BNY Mellon, PNC Bank, State Street, Truist Bank, and US Bank, on March 16.

However, the cash infusion has not helped First Republic as S&P Global reduced the bank’s stock (FRC) to junk status, citing concerns that the recent help from 11 banks may not alleviate First Republic’s problems. This was the second downgrade of FRC in less than a week. First Republic has attempted to raise capital by issuing more shares and seeking investment from private equity firms and smaller banks.

This is First Republic’s second attempt to raise capital since March 10, and then it received the deposit injection from the major lenders six days later. CNN contributor Allison Morrow was told that First Republic is facing a fate similar to that of Silicon Valley Bank (SVB) due to being a “Bay Area-based lender with a deep-pocketed client base.” Patricia McCoy, a law professor at Boston College, told Morrow that depositors are “particularly trigger-prone.”

“They’re sophisticated, they know they have other options, and they have mechanisms in place to move money quickly,” McCoy added.

At 1:15 p.m. (ET) on March 20, 2023, First Republic’s shares are down more than 25% this afternoon and trading for just above $17 per share. The bank’s shares reached an all-time intraday low while other banks managed to weather the storm on Monday following the Credit Suisse buyout.

What do you think about S&P Global downgrading First Republic Bank’s stock to junk status on Sunday? Share your thoughts about this subject in the comments section below.

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On Sunday evening, March 19, 2023, at 5:00 p.m. Eastern Time, the U.S. Federal Reserve, along with several central banks including the Bank of England, Bank of Canada, Bank of Japan, the European Central Bank, and the Swiss National Bank, announced a coordinated action to enhance the provision of liquidity via the standing U.S. dollar liquidity swap line arrangements. The announcement followed a banking crisis that began with the collapse of three U.S. banks and spread internationally.

Turmoil in Banking Industry Leads to Coordinated Action to Enhance Liquidity

Before Wall Street opened on Monday and ahead of the next Federal Reserve meeting, the U.S. central bank, along with five other major central banks, announced decisive action to add liquidity to the financial system. The participating banks included the Bank of England, Bank of Canada, Bank of Japan, Swiss National Bank, and the European Central Bank (ECB). In fact, all participating central banks published similar press releases regarding the new measures.

“To improve the swap lines’ effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of 7-day maturity operations from weekly to daily,” the Federal Reserve announcement details. “These daily operations will commence on Monday, March 20, 2023, and will continue at least through the end of April.”

so central banks literally said a form of –

“Steady lads, deploying more capital”

— sol poor | $BONK enjoyeerr | 🔥💃 (@DeChDAO) March 20, 2023

The central banks’ latest plan is a popular topic of conversation on social media and forums, as many believe that monetary tightening policies are over. Arthur Hayes, the founder of Bitmex, tweeted about the situation, saying, It’s All Over!!! This [is] what happens when no one wants to hold USD in banks that can’t borrow from the Fed using #banktermfundingprogram. Not sure how the Fed can hike when it’s handing out dollars to its peers. Cut Cut Cut.”

From Tightening to Easing

The turmoil in the banking industry began after the fall of Silicon Valley Bank and Signature Bank. The U.S. Federal Reserve announced a plan to make all uninsured depositors of both institutions whole. Shortly after, the Swiss banking giant Credit Suisse showed severe signs of weakness and borrowed 50 billion francs from the Swiss National Bank. Swiss authorities then orchestrated an emergency takeover of Credit Suisse by UBS, which acquired the financial giant for 3 billion Swiss francs ($3.2 billion).

From SVB, to medium US bank (First Republic), to global systemic bank (CS), to all central banks coordinating…

This escalated fast

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— Mid (@Elmidou) March 20, 2023

Moreover, 11 large U.S. lenders injected $30 billion into First Republic Bank last week. The latest plan by the six central banks could potentially lead to monetary expansion, credit bubbles, and more bailouts. By providing liquidity to banks and markets, the major central banks are endorsing support for the creation of credit and money within the economy. The decision by the U.S. Federal Reserve and other central banks to increase the frequency of 7-day maturity operations from weekly to daily can safely be considered monetary easing.

“The network of swap lines among these central banks is a set of available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses,” the six central banks detail in the announcement. Moreover, after Switzerland resolved the Credit Suisse problem with UBS, Fed Chair Jerome Powell and Treasury Secretary Janet Yellen issued a joint statement saying:

“We welcome the announcements by the Swiss authorities today to support financial stability. The capital and liquidity positions of the U.S. banking system are strong, and the U.S. financial system is resilient. We have been in close contact with our international counterparts to support their implementation.”

What do you think the long-term effects of the central banks’ decision to increase the frequency of 7-day maturity operations will be on the global economy? Share your thoughts in the comments section below.

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Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

Interest in the U.S. banking crisis has risen greatly over the past two weeks, as shown by Google Trends data. There has been a sharp increase in queries related to search terms such as “banking crisis,” “bank collapse,” and “bank failure.” On March 13, 2023, the search term “banking crisis” reached the top Google Trends score of 100. The related topics pertain to the financial troubles of Silicon Valley Bank, Signature Bank, and First Republic Bank.

Google Trends Shows Global Interest in U.S. Banking Crisis Spiked Last Week

Google Trends data reveals a significant increase in public interest in the U.S. banking crisis, with searches skyrocketing. A search using the term “banking crisis” shows that people are asking Google various related questions, including “What happens to my money if banks collapse?,” “What are the negative effects of a banking crisis?,” and “Which U.S. banks have collapsed?”

The surge in public interest is attributed to the collapse of three banks: Silvergate Bank, Signature Bank, and Silicon Valley Bank. Two out of the three banks are among the second and third largest bank failures in U.S. history, after Washington Mutual (Wamu) collapsed in 2008. People have also expressed concerns about other banks, including Pacwest Bancorp, First Republic Bank, and the Swiss banking giant Credit Suisse.

According to Google Trends, worldwide interest in the topic of “bank failure” reached a score of 100 on March 13. The increase began on March 9, 2023, and currently stands at 34 as of this writing. On March 13, search terms such as “banking crisis,” “bank collapse,” and “U.S. banks” all saw a significant increase in the number of searches. While a significant portion of the interest comes from the United States, there is also strong interest from countries such as Zimbabwe, Canada, China, Egypt, New Zealand, and Singapore.

Google Trends has also recorded other breakout searches, such as “banking crisis 2023,” “silicon valley banking crisis,” and “banking crisis in US.” In the past 14 days, search queries for banks of various sizes have increased, including banking giants, medium-sized financial institutions, and smaller banks. The last time searches for these terms peaked was during the Great Recession in 2008, specifically in the months of June, July, August, September, and October.

Banking-related terms, such as “deposits,” “insured deposits,” “uninsured deposits,” “bank run,” “FDIC,” “bailout,” “bailouts,” “Federal Reserve,” “Fed,” “interest rates,” “interest rate hikes,” and “rate hikes,” have also been trending upward over the last two weeks.

What do you think about Google searches and queries about the U.S. bank crisis increasing over the last month? Share your thoughts about this subject in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons, Google Trends on March 19, 2023,

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.