Friday saw another massive fall in the First Republic Bank share price.

After stock in the bank had already crashed 49.4% last Tuesday, First Republic shares closed Friday down another 43.3%. All told, the First Republic share price is now down a disastrous 98% since the banking crisis began to unfold in the US on 8 March.

That crisis has already seen the collapse of two US banks, Silicon Valley Bank and Signature Bank.

Contagion from those collapses also spread to Europe and led to the government-engineered takeover of Credit Suisse by rival bank UBS.

We'll have a look at why First Republic is now teetering on the brink of collapse below.

But first, how are the big four ASX 200 bank shares holding up today?

How are ASX 200 banks responding today?

The big four ASX 200 banks are displaying their resilience today.

Here's how the big bank stocks are tracking in morning trade on Monday:

• Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are up 0.2%
• National Australia Bank Ltd (ASX: NAB) shares are up 0.6%
• Westpac Banking Corp (ASX: WBC) shares are up 0.3%
• Commonwealth Bank of Australia (ASX: CBA) shares are up 0.5%

It appears investors are confident that the ASX 200 banks won't be subject to the same pressures sending numerous US banks into receivership.

That's likely driven by recent reports revealing that the big four banks are the most capitalised in the world, as gauged by their common equity tier 1 (CET1) ratios.

If you're unfamiliar, CET1 ratio measures the core equity capital of the ASX 200 banks compared to their risk-weighted assets.

With that said, here's why First Republic finds itself well underway on the road to collapse.

What's happening with First Republic Bank?

First Republic Bank has been badly hit by fast-rising interest rates in the US.

The bank's large holdings of low-interest rate loans left it particularly vulnerable to the past year's series of rate hikes from the US Federal Reserve.

Following another horror day for the bank's shares on Friday, the US Federal Deposit Insurance Corporation (FDIC) looks all but set to place First Republic Bank under receivership.

Should that eventuate, it would mark the third bank collapse in the US this year. None of which, remarkably, have done lasting damage to the share prices of the big four ASX 200 banks.

Commenting on First Republic's woes, professional bond investor James Wilson said (quoted by ABC News):

The First Republic collapse is set to be the second-largest bank to fail in US history, in a sign that credit markets are showing signs of seizing as a result of the aggressive [interest rate] tightening cycle we have seen from the [Federal Reserve] and global central banks.

The fear and contagion is spreading through and while inflation data continues to print at lofty levels, the Fed will not be able to cut rates unless we have a systemic issue which may be approaching.

In the most recent development, Bloomberg reports that the FDIC has reached out to major US banks including JPMorgan Chase & Co, PNC Financial Services Group, and Citizens Financial Group to submit offers to take over the embattled bank.

If that approach fails, US regulators could step in to take ownership of the bank.

With their world-leading capital positions, that's a development we're unlikely to see with the big four ASX 200 banks.

The post What's happening with ASX 200 banks today as First Republic teeters on the brink of collapse? appeared first on The Motley Fool Australia.

Investors in the big four ASX bank shares will be keeping a close eye on the charts today following a 49.4% plunge in the First Republic Bank (NYSE: FRC) share price yesterday (overnight Aussie time).

We'll look at the latest ructions to hit the United States' banking sector in a tick.

First, here's how the big four ASX 200 bank stocks are tracking at the time of writing:

• Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are up 0.04%
• National Australia Bank Ltd (ASX: NAB) shares are down 0.49%
• Westpac Banking Corp (ASX: WBC) shares are down 0.34%
• Commonwealth Bank of Australia (ASX: CBA) shares are down 0.41%

For some context, the benchmark index is down 0.09% at this same time.

The ASX 200 bank stocks look to be getting plenty of support from their very strong common equity tier 1 (CET1) ratios. This is a measurement of the core equity capital of a bank compared to its risk-weighted assets.

As The Motley Fool reported earlier in April, Australia's big four banks are the most capitalised in the world. That should offer Aussie investors some peace of mind amid the banking turmoil hitting the US and Europe.

Now, here's why investors were hitting the sell button on First Republic Bank.

ASX 200 bank stocks resilient amid new US bank meltdown

The First Republic Bank share price crashed overnight following the release of the bank's first-quarter results.

As you can imagine by the sell-off, those results fell well short of expectations.

Among the big negatives, the bank reported its deposits decreased by US$105 billion over the three months.

Investors are already on edge following the collapse of Silicon Valley Bank and Signature Bank in March. That financial contagion quickly spread to Europe, resulting in the takeover of beleaguered Credit Suisse by Swiss rival UBS.

While ASX 200 bank stocks escaped the worst of that fallout, shares in the big banks did slide during March. Today, however, they're showing resilience.

Commenting on the deposit outflows that helped send the First Republic share price into a nosedive, chief financial officer of First Republic Neal Holland said:

With the closure of several banks in March, we experienced unprecedented deposit outflows. We moved swiftly and leveraged our high-quality loan and securities portfolios to secure additional liquidity. We are working to restructure our balance sheet and reduce our expenses and short-term borrowings.

With First Republic already having received US$30 billion in emergency funding from larger banks last month, it remains to be seen how this plays out.

The post First Republic Bank shares just crashed 50%. Here's how ASX 200 bank stocks are responding appeared first on The Motley Fool Australia.

Following the collapse of several US banks– including Silicon Valley Bank, formerly the 18th largest in the country – investors are taking heart that the US Fed is stepping in to provide a deep pool of liquidity support for the sector.

The Fed joins the European Central Bank, Bank of Japan, Swiss National Bank, Bank of England and the Bank of Canada in a coordinated action intended to calm financial markets.

This comes atop yesterday's announcement that UBS will merge with embattled Credit Suisse in a deal backstopped by the Swiss government.

And judging by the performance of the big four bank stocks, these government-engineered efforts are having some success at soothing market jitters.

Here's how the big four ASX 200 banks shares are tracking in afternoon trade today:

• Australia and New Zealand Banking Group Ltd (ASX: ANZ) shares are up 1.7%
• National Australia Bank Ltd (ASX: NAB) shares are up 1.1%
• Westpac Banking Corp (ASX: WBC) shares are up 2.3%
• Commonwealth Bank of Australia (ASX: CBA) shares are up 1.1%

ASX 200 bank shares aren't the only stocks rallying today.

At the time of writing the benchmark index is up 1.2%, with the S&P/ASX 200 Financials Index (ASX: XFJ) rallying 1.6%.

Is the ASX 200 bank share party premature?

Today's rally in ASX 200 bank shares largely mirrors action seen in US and European markets yesterday (overnight Aussie time).

But not every bank is joining in the rebound.

Shares in First Republic Bank (NYSE: FRC) closed down 47% overnight amid investor concerns the $30 billion rescue package delivered by larger US banks last week might not be enough to keep it viable.

Also of potential concern, opposition is growing to the Swiss government-engineered takeover of Credit Suisse.

With Switzerland's central bank and government backstopping the deal UBS is acquiring Credit Suisse for approximately AU$4.8 billion, paid out to shareholders.

But in contravention of long-standing market rules, the bank's Additional Tier 1 bondholders will receive nothing, which will see almost $26 billion worth of the debt notes become worthless.

Some bondholders are already considering litigation, and Swiss MPs may also review the deal, which was hastily hammered out over the course of the weekend.

Should the deal unravel, ASX 200 bank shares could join their global peers in a fresh round of sell-offs.

But for now, at least, investors are breathing a sigh of relief.

The post ASX 200 bank shares shrug off global banking turmoil to leap higher appeared first on The Motley Fool Australia.