U.S. bank regulators are weighing the prospect of downgrading their private assessments of First Republic Bank (FRC.N), which could lead it to face potential curbs on borrowing from the Federal Reserve, Bloomberg News reported on Wednesday.
Senior officials are mulling whether to downgrade their scoring of the firm's condition, including its so-called Camels rating, the report said citing people, adding that would likely limit the bank's use of the Fed's discount window and an emergency facility launched last month.
The banking sector has come under renewed pressure after First Republic on Monday reported outflows of more than $100 billion in deposits in the first quarter.
The Federal Deposit Insurance Corporation (FDIC) has not reached a decision nor have officials warned the lender about their thinking while waiting on the bank's managers to shore up its balance sheet, the report said.
First Republic did not immediately respond to a Reuters request for comment, while the FDIC declined to comment.
The lender is planning to shrink its balance sheet and slash expenses by cutting executive compensation, paring back office space, and laying off nearly 20% to 25% of employees in the second quarter, it said Monday.
