United States authorities are reportedly deliberating on extending an emergency credit line for banks, “in ways” which may provide First Republic Bank with a time buffer to address its balance sheet concerns, according to people with knowledge of the situation.

In a March 26 Bloomberg report citing unnamed sources, it was reported that U.S. officials have not decided on what support, “if any,” they can provide to First Republic, however an “expansion of the Federal Reserve’s offering” is one of the options being considered.

First Republic was reportedly deemed “stable enough to operate” by regulators without the need for “immediate intervention,” while the bank and its advisers attempt to “shore up its balance sheet.”

The sources noted that while the Fed’s liquidity offerings would be reportedly expanded in accordance with banking law, which stipulates that it must be “broadly based” and not aimed at benefiting a specific bank, they also warned that the alteration could be “made in a way” that ensures First Republic Bank benefits.

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It was reported that despite First Republic facing structural challenges with its balance sheet, “the bank’s deposits are stabilizing” and is not at risk of experiencing “the kind of sudden, severe run” that led regulators to close down Silicon Valley Bank. It noted:

“It has cash to meet client needs while it explores solutions, the people said. That includes $30 billion deposited by the nation’s largest banks this month.”

This comes after the Fed announced a plan on March 19 to shore up liquidity conditions through “swap lines” – an agreement between two central banks to exchange currencies.

Coordinated central bank action to enhance the provision of U.S. dollar liquidity: https://t.co/Qs4cYY8BFO

— Federal Reserve (@federalreserve) March 19, 2023

“To improve the swap lines’ effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of seven-day maturity operations from weekly to daily,” the Fed said in a statement

The swap line network which involves the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and the Swiss International Bank, commenced on March 20 and is set to run until at least April 30.