The Controversial Rescue of First Republic Bank.

Moody's has downgraded the credit ratings of First Republic Bank due to the bank's deteriorating financial profile and challenges faced by the lender due to increased reliance on funding amid deposit outflows. The agency cut the bank's long-term issuer rating and local currency subordinate ratings to B2 from Baa1 and long-term local currency bank deposit rating to Baa3 from A1, among others. Moody's believes the bank's high cost of borrowings and the high proportion of fixed rate assets at the bank is likely to have a large negative impact on First Republic's core profitability in coming quarters.