Big banks create USD 30B rescue package for First Republic

In an effort to keep the California-based bank from becoming the third bank to collapse in less than a week and stave off a wider crisis in the banking sector, eleven of the largest banks in the United States revealed a $30 billion rescue plan for First Republic Bank on Thursday.

First Republic has a comparable clientele to Silicon Valley Bank, which collapsed on Friday as a result of about $40 billion in deposits being withdrawn in a matter of hours. It seems that First Republic, which as of December 31 had accounts worth USD 176.4 billion, was dealing with the same problems.

JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo have each committed to contribute $5 billion in uninsured deposits to First Republic as part of the aid package. Morgan Stanley and Goldman Sachs would each put $2.5 billion into the bank during this time. BNY Mellon, State Street, PNC Bank, Truist, and US Bank each contributed $1 billion towards the final $5 billion.

America's biggest banks' actions "reflect their trust in the nation's banking system," the banks claimed in their statement.

However, Silicon Valley Bank failed because its closest and most devoted clients—venture capitalists and start-ups—left the bank at the first indication of trouble, whereas the banks saved one of their rivals.