• Three major U.S. banks, Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank (SNBY) have recently collapsed resulting in financial contagion for other lenders.
• Eleven banks have provided a $30 billion bailout to First Republic bank in order to prevent its collapse and restore trust in the banking system.
• The FDIC, Treasury, and Federal Reserve have been providing bailouts to various banks due to the recent bank failures.
Recent Collapse of Three Major U.S Banks
The recent collapse of three major U.S banks – Silvergate Bank, Silicon Valley Bank (SVB), and Signature Bank (SNBY) has caused financial contagion for other lenders across the country. Depositors removed approximately $8.8 billion from Charles Schwab Corporation’s prime money market funds due to the instability in the banking industry which is why eleven lenders had to step in and provide a $30 billion bailout to First Republic bank in order to avoid its collapse and restore trust in the banking system.
Bailouts From FDIC, Treasury, and Federal Reserve
The Federal Deposit Insurance Corporation (FDIC), Treasury Department, and Federal Reserve have been providing bailouts to various banks due to the recent bank failures which included Credit Suisse receiving a 50 billion Swiss franc bailout from the Swiss National Bank following the bailout of SVB and SNBY depositors by the US central bank, Treasury Department, and FDIC.
Impact on First Republic Bank (FRC)
First Republic Bank (NYSE: FRC) experienced a tumultuous week with its stock value declining by 50.41% against the U.S dollar over five days as it explored various options such as selling assets off for liquidation but was still at risk of failure until eleven banks stepped forward with their collective $30 billion deposits into FRC’s coffers thus saving it from possible collapse on Thursday 16th March 2023 before markets closed where its shares ended up 9.98% higher than when it opened that day per share gaining back $3.11 each share since August 1986 when they were initially valued at only $10 each per share before today’s events occurred.
Eleven Banks Who Bailed Out FRC
The eleven lenders who collectively provided a bailout of thirty billion dollars towards FRC included giants such as Bank of America, Citigroup, JPMorgan Chase, Wells Fargo Goldman Sachs’s Morgan Stanley‘ BNY Mellon’s PNC Bank State Street Truist Bank & US Banks who all issued an official statement addressing funding that mentioned after government receiverships of SVB & SNBY “a few banks experienced uninsured deposit outflows „and “the actions of these largest banks show their trust towards our country’s banking system“.
Conclusion
The recent fall of three major US Banks has caused turbulence throughout our banking institution which has impacted both domestic & international markets leading many financial institutions such as Credit Suisse & First Republic Banks being bailed out by government officials including those from FDIC ,Treasury department & Federal Reserves however despite this chaos Eleven Lenders stepped up providing thirty Billion Dollars towards FRC restoring faith within our banking system & securing liquidity .
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