Fed, FDIC Prepared to Bail Out Texas Bank
The Federal Reserve and the Federal Deposit Insurance Corp. are prepared to help First RepublicBank of Texas in a bailout plan that may cost $5 billion, Sen. Lloyd Bentsen of Texas said Wednesday.
The Dallas-based bank, the largest in Texas, has been suffering from bad loans and withdrawals by nervous depositors.
Saying he had talked with Fed Chairman Alan Greenspan as well as the head of the FDIC and the comptroller of the currency, Bentsen told reporters, “I can assure that all of those financial institutions are standing by to help.”
With the FDIC concentrating “on capital and the Federal Reserve assisting on liquidity, they are going to do all they can to see that this situation is stabilized, and I think they are going to bring that about,” Bentsen said.
The Texas Democrat said he was told that the bailout plan may cost as much as $5 billion, which would make it the largest one in U.S. banking history.
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