Eleven of the biggest banks in the U.S. have announced a $30 billion rescue package for First Republic Bank.
Eleven of the biggest banks in the country announced a $30 billion rescue package for First Republic Bank on Thursday, in an effort to prevent the California-based bank from becoming the third bank to fail in less than a week.
In a statement, the group of banks confirmed that other unnamed banks had seen large amounts of withdrawals of uninsured deposits, which are those that exceed the $250,000 level insured by the Federal Deposit Insurance Corporation. First Republic's shares dropped more than 60% Monday, even after the bank said it had secured additional funding from JPMorgan and the Federal Reserve.
JPMorgan Chase, Bank of America, Citigroup and Wells Fargo have agreed to each put $5 billion in uninsured deposits into First Republic. Meanwhile Morgan Stanley and Goldman Sachs would deposit $2.5 billion each into the bank. The remaining $5 billion would consist of $1 billion contributions from BNY Mellon, State Street, PNC Bank, Truist and US Bank.
The news could help calm the nerves of bank investors after the collapse last week of Silicon Valley Bank, which was the second biggest bank failure in U.S. history after the demise of Washington Mutual in 2008.
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