JPMorgan, Citigroup, others to rescue distressed First Republic Bank
A group of American banks are preparing to lend $30 billion to First Republic Bank to save it from collapsing.
To prevent a collapse, First Republic, which has been at the epicentre of the crisis consuming a portion of the banking industry, would get a sizable infusion of deposits from other lenders, as announced on Thursday.
“This show of support by a group of large banks is most welcome and demonstrates the resilience of the banking system,” the bank’s treasury Department in a statement said.
The troubled San Francisco lender will receive the $30 billion to fulfil customer withdrawals and bolster trust in the U.S. banking industry.
To allay investors’ concerns and strengthen the banking sector, the midsize lender agreed to accept $30 billion in deposits from 11 banks on Thursday.
JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and Truist are among the major banks releasing funds to First Republic.
Despite efforts over the weekend to stabilise its finances with $70 billion in emergency loans and other liquidity from the Federal Reserve and JPMorgan Chase, First Republic has lost more than 70 per cent of its market value since the collapse of Silicon Valley Bank.
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