Banks said to be working on rescue plan for First Republic
Some of America’s largest banks are working on a rescue package for First Republic Bank
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Your support makes all the difference.Some of America's largest banks are working on a rescue package for First Republic Bank, according to several media reports.
First Republic Bank's stock began to falter as customers began pulling their deposits out. But it was up more than 6% Thursday after reports of the recue package surfaced.
The news comes after the collapse last week of Silicon Valley Bank, which was the second biggest bank failure in U.S. history after the demise of Washington Mutual in 2008.
The shuttering of Silicon Valley Bank Friday and of New York-based Signature Bank two days later has revived bad memories of the financial crisis that plunged the United States into the Great Recession of 2007-2009.
Over the weekend the federal government, determined to restore public confidence in the banking system, moved to protect all the banks' deposits, even those that exceeded the FDIC’s $250,000 limit per individual account.
Bank of America, Wells Fargo, Citigroup and JPMorgan Chase are in discussions to deposit billions of their own money to help shore up First Republic Bank, according to The Wall Street Journal, which cited anonymous sources. Morgan Stanley, Goldman Sachs, U.S. Bancorp and PNC Financial Services Group are also said to be involved.
Each participating bank is expected to contribute differing amounts, but they are all likely to contribute at least $1 billion each, the Journal said.
The plan, which could be announced Thursday, has been discussed with officials and regulators in Washington, the Journal said. Details are still being hammered out though.
The White House had no comment Thursday on the reports of the rescue package for San Francisco-based First Republic Bank, which has more than $200 billion in assets.