First Republic Bank in the United States (US) became one of the institutions that were on the brink of the impact of the case of the collapse of Silicon Valley Bank. The shaky trust of customers caused the bank’s shares to drop and deposits decreased.
Even so, a group of large US banks took action to save First Republic Bank by depositing US$ 30 billion or Rp. 462 trillion (exchange rate of Rp. 15,400).
Reported CNBC, Friday (17/3/2023), this step by big banks was taken as a sign of confidence in the banking system. There are at least 11 banks that have deposited their funds with First Republic Bank.
Mulai dari Bank of America, Wells Fargo, Citigroup, JP Morgan Chase, Goldman Sachs, Morgan Stanley, Truist, PNC, US Bancorp, State Street, Bank of New York Mellon.
Bank of America, Wells Fargo, Citigroup and JPMorgan Chase will contribute about US$5 billion each. Then, Goldman Sachs and Morgan Stanley will deposit around US$ 2.5 billion. Then, Truist, PNC, US Bancorp, State Street, and Bank of New York Mellon will each deposit around US$1 billion.
“This action by America’s largest bank reflects their trust in First Republic and banks of all sizes, and it demonstrates their overall commitment to helping banks serve their customers and communities,” the bank group said in a statement.
The deposit must be kept in the bank for at least 120 days. Regional bank shares initially fell on Thursday, but turned higher after reports on developing deposit plans.
The news comes after First Republic shares have taken a beating in recent days, sparked by the crashes of Silicon Valley Bank last Friday and Signature Bank over the weekend. Both banks have uninsured deposit amounts, as well First Republic Bank, leading to concerns that customers will withdraw their money. New deposits from major banks are not insured.