Eleven of the biggest banks in the country announced a $30 billion rescue package for First Republic Bank on Thursday, in an effort to prevent the California-based bank from becoming the third bank to fail in less than a week.
First Republic serves a similar clientele as Silicon Valley Bank, which failed Friday after depositors withdrew about $40 billion. It appears that First Republic, which had deposits totaling $176.4 billion as of Dec. 31, was facing a similar crisis.
Thursday the bank's shares were down as much as 36%, but rallied after reports the rescue package was in the works, and closed up nearly 9%. "The actions of America's largest banks reflect their confidence in the country's banking system," the banks said in their statement."This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system," said Treasury Secretary Janet Yellen, Acting Comptroller of the Currency Michael Hsu, Federal Reserve Chair Jerome Powell and FDIC Chairman Martin Gruenberg.
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