After several banks including Silicon Valley Bank (SVB) collapsed, the big US banks have come together to save another local bank, First Republic Bank, from drowning, and they have announced help. A consortium of 11 private US banks, including Bank of America, Citigroup and JPMorgan Chase, announced that they would deposit US$30 billion in First Republic. By the way, after the failure of Silicon Valley Bank last week, it was expected to affect other banks as well.
Banks have taken this unique initiative as part of efforts to keep the system in order after three medium-sized banks failed during the last week. “This step by America’s largest banks reflects the confidence they place in First Republic and banks of all sizes,” the group said in a statement.
“Together, we are channeling our financial strength and liquidity into a wider system where it is most needed,” the banks said.
Shares of First Republic then reversed early losses, and closed with a 10 percent jump on Thursday in the Wall Street market.
Top officials from the US Department of the Treasury, the US Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency said in a joint statement, “The big banks’ showing of support is a welcome step, and an important step in tackling the problems in our banking system.” Shows the power of…”