Mr Safra, who has formed a close relationship with HSBC's chairman, John Bond, since the deal was struck in May, has offered to set aside up to $1bn of the $3bn he stands to get from the deal. This would be put aside in an escrow account to cover any fallout from the billion dollar securities scandal that had rocked the bank.
The $10.3bn deal has been on hold since US Federal investigators arrested a client, Martin Armstrong, on charges of security fraud after it emerged that he had allegedly misled Japanese investors about the returns they were receiving from investing in his funds.
The personal intervention by Mr Safra is believed to have broken a three- month log jam which has prevented the deal being concluded on time.
It had been widely thought that HSBC would seek to reduce the purchase price from $72 a share to at least $69 to cover any possible risk or, indeed, back out of the deal altogether.
Well-placed New York sources said last night that they now believed it was very likely that the deal would go ahead at the original price of $72 a share.
Neither HSBC nor Republic would comment officially on the likelihood of a deal.
However, it is understood that the two sides are working flat out with lawyers in order to meet a deadline of early next week for filing the necessary legal paperwork to ensure that a meeting of Republic shareholders to approve the deal can take place as planned at the end of November.
The deal could then be approved at the last meeting of New York banking regulators this year, which will take place on 3 December.
The likelihood is that a formal announcement confirming the deal will be made on Monday, although sources said there is an outside chance it could happen today.