Eleven banks in the United States inject $30,000 million into the First Republic to avoid bankruptcy

Eleven US banks, including Bank of America, Citigroup and JPMorgan, agreed to deposit $30,000 million in the First Republic, a sign of their “confidence in the banking system” of the country, according to a joint statement.

“This action by major US banks reflects their faith in the First Republic and in banks of all sizes,” the group said, after three banks failed in less than a week.

“This show of support from a group of major banks is greatly appreciated and demonstrates the resilience of the banking system,” assured the directors of the Treasury Department.

The 11 banks, including the giants such as JPMorgan and Bank of America -the largest in the country- announced the agreement, which prevents First Republic from following the path of Silicon Valley Bank and Signature Bank, entities closed by the authorities on Friday and Sunday respectively.

In trouble

The bankruptcy of these companies unleashed a current of panic which then spread to Europe, and forced the US authorities to show their confidence in the banking system, assuring that the situation It is very different from what happened in 2008 with the economic crisis.

This Thursday, the same Treasury secretary, Janet Yellen, assured it in an appearance before lawmakers the sector “is solid” and that citizens can trust that their deposits are insured.

He also promised to assess the conditions that led to the failure of both banks, and especially the oversight of regulators, who were unable to foresee the debacle.

Following today’s announcement, shares of First Republic increased by 11.42%, as of 15:42 local time, 19:42 GMT, in stark contrast to the nearly 30% drop this morning.

First Republic had the third-highest rate of uninsured deposits among U.S. banks, behind Silicon Valley Bank (SVB) and Signature Bank, according to a note from Raymond James.