Eleven US banks, including Bank of America, Citigroup and JPMorgan,
agreed to place $30 billion in deposits with First Republic,
signaling their "confidence in the banking system" in the country, according to a joint statement.
"This action by America's largest banks reflects their confidence in First Republic and in banks of all sizes," the group said, after three banks failed in less than a week.
"This show of support from a group of large banks is greatly appreciated, and
demonstrates the resilience of the banking system,"
said the directors of the Treasury Department.
The 11 banks, including giants
such as JPMorgan and Bank of America
- the largest in the country - announced the agreement, which prevents First Republic from following the path of Silicon Valley Bank and Signature Bank, entities closed by authorities on Friday and Sunday, respectively.
The First Republic Bank in San Francisco.
The bankruptcy of these firms unleashed a current of panic that later spread to Europe, and has forced the US authorities to make clear their confidence in the banking system, assuring that the situation is very different from what happened in 2008 with the crisis
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.
He also promised to evaluate the conditions that have given rise to the bankruptcy of both banks, and especially the supervision of the regulatory entities, which were not able to foresee the debacle.
Following today's announcement, First Republic shares
were up 11.42%
as of 3:42 p.m. local time, 7:42 p.m. 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.
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