Despite receiving $30 billion in deposits from a group of major US banks last week, First Republic Bank's liquidity issue remains a concern for investors.
Making matters worse was the action of S&P Global which downgraded its credit rating for the bank for the second time in a week.
This caused First Republic Bank shares to fall 47% at the opening of trading earlier in the week (Monday) to an all-time low.
S&P Global downgraded the bank deeper to 'junk' status on Sunday and said the influx of deposits by 11 major US banks last week may not solve its liquidity problems.
In the meantime, US officials are reportedly looking for ways to temporarily expand the protection offered to bank customers by the Federal Deposit Insurance Corp (FDIC) for deposits above the current limit of $250,000.
Like the collapsed Silicon Valley Bank (SVB), most of First Republic's customers hold more than the $250,000 amount covered by federal insurance.
However, the move may face political obstacles, as Republicans in the House of Representatives on Monday vowed to oppose any extension of protections.
