Five of the US largest banks have united to provide financial aid to a struggling institution. First Republic Bank is set to receive up to $30 billion in deposits from JP Morgan, Bank of America, Wells Fargo, Citi, and others with the support of the U.S Government. However, this deal will help stabilize First Republic Bank and comes at a critical time following the collapse of Silicon Valley Bank and Signature bank last week, which has sparked concern in the banking sector.
$30 Billion in Deposits to Be Provided by JP Morgan, Bank of America, Wells Fargo, and more
The collapse of SVB Financial is the largest bank failure since the 2008 financial crisis, causing waves of panic throughout the financial sector. To save the industry, a rescue plan has been put into motion that will benefit struggling First Republic Bank to the tune of $30 billion in deposits from JP Morgan, Bank of America, Wells Fargo, and more. Other financial institutions also involved in the effort include Morgan Stanley, US Bancorp, Truist Financial Group, and PNC Financial Services.
Rumors of a potential plan to rescue First Republic Bank began circulating earlier today. As reported by Fortune, the banks involved are expected to deposit $5 billion each, with smaller banks providing lesser amounts, according to sources. Following this news, the stock for the First Republic fell 36% on Thursday before rising 10%, and trading was subsequently paused due to volatility. Reports have indicated that the bank is exploring various solutions, including a potential sale, to safeguard it from a similar outcome as Silicon Valley Bank.
