11 US banks spend $30 billion to rescue First Republic

First Republic Bank headquarters in San Francisco, California, USA - Photo: AFP

According to AFP news agency, 11 private US banks including big names such as Bank of America, Citigroup and JPMorgan Chase have announced that they will deposit 30 billion USD into First Republic Bank.

Observers say this is an impressive initiative by banks to strengthen the system, after the failure of many mid-sized banks last week.

“This action by America’s largest banks reflects their confidence in First Republic and banks of all sizes,” the group of 11 banks said in a joint statement.

“Together, we are deploying our financial strength and liquidity into the larger system.”

"The support provided by a group of major banks is welcome and demonstrates the resilience of the banking system," said leaders of the Treasury Department, the Federal Reserve, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency.

First Republic shares recouped some of their earlier losses, closing up more than 10% on Wall Street on March 16.

Bank of America, Citigroup, JPMorgan Chase and Wells Fargo are each placing $5 billion in uninsured deposits with First Republic, AFP reported.

Meanwhile, Goldman and Morgan Stanley will each deposit $2.5 billion. A group of five other banks will each deposit $1 billion.

Shortly after the latest developments, First Republic founder Jim Herbert and CEO Mike Roffler sent their thanks for the “collective support that helped bolster liquidity.”

Earlier, the Fed and other US regulators took a series of emergency measures late on March 12 to save depositors at two banks, Silicon Valley Bank (SVB) and Signature.

The Fed said on March 16 that it had lent nearly $12 billion to US banks under a new one-year lending program announced on March 12.

According to VnExpress