Monday, June 24, 2024

Big U.S. banks inject billions into regional bank

(BBC News) A group of big U.S. banks has injected $30 billion into a smaller regional bank, First Republic, which had been seen as at risk of failure.

The move came as authorities in the U.S are trying to quell panic over the health of the banking system, after a series of bank collapses in the U.S.

Worries about the sector have spread globally, raising fears of a crisis.

U.S. regulators called the move “most welcome,” while the banks said their action reflected their “confidence.”

They said the banking system had plenty of cash and made big profits.

“Recent events did nothing to change this,” they said. “The actions of America’s largest banks reflect their confidence in the country’s banking system.”

Reports of plans for the aid from the 11 banks, led by JP Morgan and Citigroup, helped lift financial markets and sent shares in First Republic surging more than 20% at one point, triggering trading halts.

But a selloff started again in after-hours trade in a sign that concerns remain.

The San Francisco-based firm had seen its share price plunge nearly 70% over the last week, as investors worried it was the next bank at risk of a rush of customers withdrawing their deposits.

 

https://www.bbc.com/news/business-64973321

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