Major banks pledge $30 billion rescue for First Republic

A First Republic Bank branch in Oakland, California.
(Image credit: Justin Sullivan/Getty Images)

First Republic Bank will receive $30 billion in deposits from 11 banks, in an effort to stabilize the lender and boost confidence in the U.S. banking system as a whole.

JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, and Truist are among the banks giving infusions of $5 billion, $2.5 billion, and $1 billion. In a statement released Thursday, the Treasury Department said their action "is most welcome, and demonstrates the resilience of the banking system."

Subscribe to The Week

Escape your echo chamber. Get the facts behind the news, plus analysis from multiple perspectives.

SUBSCRIBE & SAVE
https://cdn.mos.cms.futurecdn.net/flexiimages/jacafc5zvs1692883516.jpg

Sign up for The Week's Free Newsletters

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

From our morning news briefing to a weekly Good News Newsletter, get the best of The Week delivered directly to your inbox.

Sign up

Treasury Secretary Janet Yellen called JPMorgan CEO Jamie Dimon first to discuss the deal, people familiar with the matter told The Washington Post, and then they both reached out to the other banks to get them on board. "They're trying to create a firewall to protect themselves from further angst about the banking systems and continued bank runs," Mark Zandi, an economist at Moody's Analytics, told the Post. "It's about shoring up the weakest links in the banking system and, in doing so, inoculating themselves from the fire getting to them."

Stocks rose once the plan was announced, with First Republic's shares ending the day up more than 10 percent.

Explore More
Catherine Garcia, The Week US

Catherine Garcia has worked as a senior writer at The Week since 2014. Her writing and reporting have appeared in Entertainment Weekly, The New York Times, Wirecutter, NBC News and "The Book of Jezebel," among others. She's a graduate of the University of Redlands and the Columbia University Graduate School of Journalism.