Eleven of the largest U.S. banks place uninsured deposits worth $30 billion in First Republic Bank.
These deposits provide the necessary liquidity for the First Republic. Also, the decision of financial institutions is a confirmation of their trust in a lender who finds himself in a difficult situation. This is stated in a joint press release of the banks that placed deposits.
Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo each contributed $5 billion. Goldman Sachs and Morgan Stanley each provided $2.5 billion. BNY Mellon, PNC Bank, State Street, Truist, and U.S. Bank each contributed $1 billion.
In a joint press release, the banks state that they are channeling their power and liquidity into a larger system that needs it. Small and medium-sized financial institutions support their local customers and businesses, create millions of jobs and help eliminate pessimism in the community.
The news about the placement of deposits was published the day after it became known that First Republic Bank was considering a sale. This week, the rating of the financial institution declined due to the turmoil in the banking sector.
First Republic has published a press release stating that making deposits is a demonstration of the confidence of representatives of the financial system in the future of the bank and its ability to continue to provide services in the same mode. It is also said that collective support strengthens the liquidity position, reflects the constant quality of business, and is a vote of confidence for the entire banking system.
The financial institution also received additional liquidity due to borrowing opportunities.
The US Treasury Department, the Federal Reserve System, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) in a joint statement welcome the placement of deposits.
As we have reported earlier, Credit Suisse to Borrow Up to $54bn from Swiss Central Bank.