New York (EFE).- A group of US financial institutions rescued First Republic Bank on Thursday with 30,000 million dollars, as announced in a joint statement.
“Bank of America, Citigroup, JPMorgan Chase and Wells Fargo today announced that they will each make a $5 billion uninsured deposit to First Republic Bank. Goldman Sachs and Morgan Stanley will each make an uninsured deposit of $2.5 billion, and BNY Mellon, PNC Bank, State Street, Truist and US Bank will each make an uninsured deposit of $1 billion,” according to the document.
Following this announcement, First Republic shares were up 11.42% at 3:42 p.m. local time (1942 GMT), a stark contrast to a nearly 30% drop earlier this morning.
First Republic had the third highest rate of uninsured deposits among US banks, behind Silicon Valley Bank (SVB) and Signature Bank, according to a note by Raymond James.
San Francisco-based First Republic was downgraded to junk on Wednesday by both Fitch Ratings and S&P Global.
With this movement, First Republic is prevented from following the path of Silicon Valley Bank and Signature Bank, entities closed by the authorities on Friday and Sunday, respectively, in a movement that unleashed a wave of panic that later spread to Europe.
The US Treasury, grateful for the aid to the First Republic
The Treasury Department, the Federal Reserve (Fed) and other US public institutions thanked this Thursday for the rescue of the First Republic Bank by a group of 11 firms, which have committed today to deposit 30,000 million dollars in the bank to avoid its bankruptcy .
“This show of support from a group of large banks is greatly appreciated, and demonstrates the resilience of the banking system,” the directors of the offices said in a statement.
This Thursday, the Treasury Secretary herself, Janet Yellen, assured in an appearance before legislators that the sector “is solid” and that citizens can trust that their deposits are insured.