Declaring First Republic systemically important?

 So if you can sell the assets for about $210 billion, then the government and all of the depositors get paid back in full; if you can’t, they don’t. 

(Either way, the shareholders are, uh, in trouble.) Again, the assets are worth something like $206 billion, based on First Republic’s filings in December; that would not quite be enough to pay everyone back. 

But the consensus seems to be that if you actually had to go sell everything at once, things would be considerably worse, and there would be a hole of tens of billions of dollars.

The most straightforward do-something option is that the FDIC could seize First Republic, sell its assets, and use the money to pay back depositors. 

But there would be a hole of tens of billions of dollars. 

And the FDIC would either have to fill that hole (declaring First Republic systemically important and using its deposit insurance fund to pay off the uninsured depositors), or not fill that hole (letting the uninsured depositors bear the loss). 

Matt Levine Bloomberg 27 april 2023

https://www.bloomberg.com/opinion/articles/2023-04-27/first-republic-is-in-limbo

First Republic FDIC

https://englundmacro.blogspot.com/2023/04/first-republic-fdic.html