U.S. bank regulators are weighing the prospect of downgrading their private assessments of First Republic Bank — a move that may curb the troubled firm’s access to Federal Reserve lending facilities, Bloomberg News reported. The Federal Deposit Insurance Corp. has been giving the bank time to reach a private deal to shore up its finances. But as weeks keep passing without a transaction, senior officials are increasingly weighing whether to downgrade their scoring of the firm’s condition, including its so-called Camels rating, according to people with direct knowledge of the talks. That would likely limit the bank’s use of the Fed’s discount window and an emergency facility launched last month. The FDIC hasn’t reached a decision, nor have officials warned First Republic about their thinking while waiting on the bank’s managers to shore up its balance sheet, some of the people said, asking not to be identified discussing the private conversations. If the firm is able to reach a deal with new backers to strengthen its finances, that could head off the need to lower ratings.
