(C) Common Dreams
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Wall Street’s Biggest Banks Rescue Teetering First Republic [1]
['Rob Copeland', 'Lauren Hirsch', 'Alan Rappeport', 'Maureen Farrell']
Date: 2023-03-16
In an extraordinary effort to stave off financial contagion and reassure the world that the American financial system was stable, 11 of the largest U.S. banks came together on Thursday to inject $30 billion into First Republic Bank, a smaller peer on the brink of collapse after the implosion of Silicon Valley Bank last week.
Hatched on Tuesday during a call between Treasury Secretary Janet L. Yellen and Jamie Dimon, the chief executive of JPMorgan Chase, the plan has each bank depositing at least $1 billion into First Republic. It is meant as a show of support for First Republic and a signal to the market that the San Francisco lender’s woes do not reflect deeper trouble at the bank.
Ms. Yellen believed that such a move by the private sector would underscore confidence in the health of banks. Mr. Dimon, whose bank saved several rivals during the 2008 financial crisis, was on board.
In 48 hours, the deal was done.
The arrangement was without precedent in decades, and an indication of how dire the banking sector’s predicament had become within a week. With its echoes of the 2008 financial crisis, the collapses of Silicon Valley Bank on Friday and Signature Bank on Sunday sparked a panic that appears unlikely to subside immediately.
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[1] Url:
https://www.nytimes.com/2023/03/16/business/first-republic-bank-sale.html
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