A group of major US banks wants to save the troubled financial institution First Republic. The regional bank from San Francisco will be supported with uninsured deposits in the amount of 30 billion dollars (around 28 billion euros), the US authorities announced on Thursday during the opening of the US stock exchanges.
In doing so, in the midst of the recent turbulence, also around Credit Suisse, they wanted to send a signal that the US financial industry is ready quickly and with large sums of money to convey to savers and companies that their money is still safe with the banks and available at all times.
According to the authorities and the banks, eleven institutions are involved in the rescue: JP Morgan Chase, Wells Fargo, Goldman Sachs and Truist, Morgan Stanley, BNY Mellon, State Street, US Bank, PNC and Bank of America. The help was initiated by the banks.
After the collapse of Silicon Valley Bank and Signature Bank, there was concern that the mid-sized First Republic could be next. It has a similar clientele as the start-up financier Silicon Valley Bank. Customers withdrew their money and the stock price plummeted.
The news about the planned rescue package caused the share to rise again significantly on Thursday, after having previously lost up to 36 percent in value.
US regulators and the Treasury Department said tonight they welcomed the banks' decision to help the First Republic. This shows the resilience of the US banking system, said Treasury Secretary Janet Yellen, Fed Chair Jerome Powell and other senior financial officials in a statement.
"Everything on shares" is the daily stock exchange shot from the WELT business editorial team. Every morning from 7 a.m. with our financial journalists. For stock market experts and beginners. Subscribe to the podcast on Spotify, Apple Podcast, Amazon Music and Deezer. Or directly via RSS feed.