A group of 11 major banks have provided $30bn (£24.7bn) in cash in an attempt to end a crisis of confidence surrounding another major US bank.
First Republic, a regional lender, was among those to have seen its share price collapse this week amid sector-wide balance sheet scrutiny prompted by the collapse of Silicon Valley Bank (SVB) last Friday.
The rescue funds, provided by peers including JPMorgan, Citi, Bank of America and Wells Fargo, were handed over hours after Switzerland’s second-largest lender was handed a €50bn (£44.5bn) lifeline by the country’s central bank.
Credit Suisse had come under the same kind of share price assault as First Republic, largely the result of fears that rising interest rates imposed by central banks to tackle inflation had damaged their balance sheets.
Unlike with SVB last week, when the US government effectively took control, it was reported by the Reuters news agency that US Treasury secretary Janet Yellen had discussed a bank-led rescue with JPMorgan’s boss as early as Tuesday.
Ms Yellen, a former chair of the US Federal Reserve, was understood to have helped hatch the plan which was designed to be a show of support and resilience in the face of concerns of a new banking crisis.
A statement said the rescue, in the form of time-limited deposits, demonstrate “their overall commitment to helping banks serve their customers and communities.”
First Republic responded: “This support from America’s largest banks reflects confidence in First Republic and its ability to continue to provide unwavering exceptional service to its clients and communities.”
