First Republic asset sales would pose 'contained damage' to residential mortgage bond market, says Goldman

Any rescue plan of First Republic Bank that includes sales of its government backed residential mortgage bonds would likely result in “contained damage,” according to Goldman Sachs.

First Republic FRC has returned to the spotlight in recent days as reports of a potential rescue effort of the bank emerged, including a Bloomberg report of a potential sale of $50 billion to $100 billion of its assets from its balance sheet. “At first glance, this would appear to be an unfriendly development” for the roughly $8.8 trillion agency residential mortgage-bond market, given recent sales of assets seized by the Federal Deposit Insurance Corp. from Silicon Valley Bank and Signature Bank, wrote Goldman team of analysts led by Lotfi Karoui, in a weekly client note.

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Dow, S&P 500 close lower Wednesday as First Republic woes eclipse Big Tech earnings: Live updatesThe Dow lost more than 200 points as investors’ worries around First Republic overpowered their excitement around Big Tech earnings. The Dow fell 0.68%. The S&P 500 shed 0.39%. The Nasdaq popped 0.47%.
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