San Francisco– Shares in the troubled First Republic Bank crashed more than 46 per cent after reports the San Francisco-based bank may need to raise more funds despite a $ 30 billion rescue last week.

As the growing banking crisis spread into a new week, the credit rating of the regional bank was downgraded deeper into junk status by S&P Global, the Guardian reported.

The agency said that the bank, which caters to wealthy clients, probably faced “high liquidity stress with substantial outflows”.

US officials are studying how to temporarily expand the protection offered to banking customers by Federal Deposit Insurance Corp (FDIC) to include all deposits, going beyond the current $250,000 cap, Bloomberg reported.

Like the collapsed Silicon Valley Bank (SVB), a large proportion of First Republic’s customers hold more than the $250,000 amount guaranteed by federal insurance.

However, the move may face political roadblocks.

Hardline Republicans in the House of Representatives on Monday vowed to oppose any cover extension, the Guardian reported.

The Republican House Freedom Caucus said in a statement: “Any universal guarantee on all bank deposits, whether implicit or explicit, enshrines a dangerous precedent that simply encourages future irresponsible behavior to be paid for by those not involved who followed the rules.”

First Republic’s woes follow the collapse of SVB and New York-based Signature. Over the weekend Credit Suisse became the largest institution so far to be embroiled in the upheaval when the Swiss government forced the troubled bank into a cut-price takeover by rival UBS.

First Republic has struggled to reassure depositors that it will not suffer the same fate as SVB and Signature.

Last week, the bank increased borrowings from the US Federal Reserve and then suspended its common stock dividend despite holding about $213 billion in assets and $176 billion in deposits, the Guardian reported.

Efforts to provide new support to First Republic are being led by the JP Morgan CEO, Jamie Dimon, the Wall Street Journal reported.

In a regulatory filing, the First Republic executive chairman, Jim Herbert, and the CEO, Mike Roffler, said the cash injection “is a vote of confidence for First Republic and the entire US banking system”.

But First Republic’s shares have lost 80 per cent of their value over the past 10 days on fears of a bank run.

About 70 per cent of First Republic’s deposits are uninsured, well above a 55 per cent average for medium-sized banks, a figure that puts the bank third after SVB (94 per cent) and Signature Bank (90 per cent), according to Bank of America. (IANS)