A struggling US bank was bailed out by industry peers. Eleven other banks are providing more than $30 billion in financial support to First Republic Bank to prevent the bank from going bankrupt. The capital injection is supported by the US government and the country’s central bank.
Before that, two banks went bankrupt, Silicon Valley Bank (SVB) and Signature Bank. This has caused significant concern among investors worldwide. First Republic Bank has also struggled in recent days amid rumors that this bank will soon fall. Bank shares in AEX also fell sharply.
On Thursday, the bank’s shares were in trouble again, so trading had to be halted several times. As rumors of a possible recovery of the FRB surfaced, the course went up sharply. It even ended up positive in the end.
confidence restored
Deposits taken from other banks renewed investor confidence. The biggest contributors were Bank of America, Wells Fargo, Citigroup and JPMorgan Chase. The total amount exceeding $30 billion will remain in the First Republic Bank account for at least 3 months.
According to the Bloomberg news agency, the support campaign was initiated by the US government. The Secretary of the Treasury is said to have met with the CEO of JPMorgan, one of the world’s largest lenders, today.
Source: NOS
Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.
