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First Republic Bank FRC shares are trading higher Tuesdayfollowing reports suggestingJP Morgan Chase & Co JPM CEO Jamie Dimonis leading discussions to come up with a new rescue plan for the bank.Treasury Secretary Janet Yellen alsosaid the government is prepared to take more action to aid banks, which could be positively impacting the stock.

What To Know: According to a Wall Street Journal report,Dimon isleading talks with other executives frombig banks in an effort to figure out how to stabilize First Republic.

The talks are reportedly centered around ways the banking industry could help strengthen the troubled bank's capital position. It's possible the banks could invest in First Republic themselves, according to people familiar with the matter.

The Treasury Secretaryalso said on Tuesday the government is prepared toprovide guaranteed deposits if contagion in thebanking system worsens.

"Our intervention was necessary to protect the broader U.S. banking system, Yellen said, referencingrecent government actions.

"And similar actions could be warranted if smaller institutions suffer deposit runs that pose the risk of contagion.

The news comes after First Republicstock traded significantly lower on Monday amidcontinued uncertainty surrounding thefate of the bank.

Following the collapse ofSVB Financial GroupSIVB andSignature BankSBNY , several banksexperienced elevated net deposit outflows and it seemsFirst Republic was impacted the most.

From Monday:First Republic Stock Falls As Fate Of The Bank Remains Unclear

Late last week, the bank announced a deal for $30 billion in deposits from several major banks and said it has decided tosuspend its dividend.

Many hoped that the $30 billion would be enough to restore confidence, but CNBC's David Faberon Mondaynoted that it's not clear ifit worked.

"I continue to talk to many people who believe this company needs to be sold and they question, in fact, whether or not it can be without government help," Faber saidon CNBC's "Squawk On The Street."

FRC Price Action: FRC shares fell on Monday adding to more than 90% declines just this month. The stock is bouncing back Tuesday and was last up 31.2% at$16.03, according toBenzinga Pro.

Photo viaShutterstock.

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