The country’s largest banks have banded together to support other financial institutions in difficulty. Specifically, First Republic Bank will receive up to $30 billion in deposits from JP Morgan, Bank of America, Wells Fargo and Citi.
Bloomberg reported that this growth plan is backed by the US government. In addition, this deal will stabilize financial institutions and address growing concerns in the banking sector after the collapse of Silicon Valley Bank and Signature Bank last week.
First Republic to Stabilize With New Plan
The collapse of SVB Financial is the biggest bank failure since the 2008 financial crisis. Moreover, it has caused a new panic in the financial industry. Now, with the financial industry in turmoil, another struggling financial institution will benefit from the ongoing industry rescue plan.
First Republic Bank will receive up to $30 billion in deposits from JP Morgan, Bank of America, Wells Fargo and others. In addition, Morgan Stanley, US Bancorp, Truist Financial Group and PNC Financial Services are also participating in the rescue plan.
Rumours about the bank’s rescue plan have been circulating since earlier today. Later, Fortune magazine reported that the plan calls for the banks involved to deposit $5 billion each, with “smaller banks providing smaller amounts of money,” sources said.
After the incident, First Republic’s stock fell 36% on Thursday and then rose 10%, but trading was halted due to the volatility. There are also reports that the company is considering solutions, including a sale, to avoid a Silicon Valley Bank-like situation.
