The largest banks in the US have joined to support First Republic Bank by providing $30 billion in money to backstop the firm reflecting their “confidence in the country’s banking system.
Bank of America, Citi, JP Morgan Chase, and Wells Fargo each have committed $5 billion in an uninsured deposit into First Republic Bank.
Goldman Sachs and Morgan Stanley are each making an uninsured deposit of $2.5 billion, and BNY-Mellon, PNC Bank, State Street, Truist and U.S. Bank are each making an uninsured deposit of $1 billion.
The dramatic move is designed to show their commitment to helping banks serve their customers, stating that regional, midsize, and small banks are critical to the economy.
The banks noted that following the receiverships of Silicon Valley Bank and Signature Bank, there were outflows of uninsured deposits at a small number of banks. Much of this money went into the largest banks, which are now partnering to stave off further contagion.
The consortium stated:
“Together, we are deploying our financial strength and liquidity into the larger system, where it is needed the most. Smaller- and medium-sized banks support their local customers and businesses, create millions of jobs and help uplift communities. America’s larger banks stand united with all banks to support our economy and all of those around us. “
