Four of the Country’s Most Powerful Banks Join Forces to Provide $30 Billion Cash Infusion to First Republic Bank

In a move to stabilize the banking industry and ease market anxieties, four of the country’s most powerful banks, JPMorgan Chase, Wells Fargo, Citigroup and Truist, have joined forces to provide a $30 billion cash infusion to First Republic Bank.

The Federal Reserve (Fed) reported that banks had borrowed around $300 billion in emergency funding in the past week, with nearly half of that amount going to holding companies for two failed banks to pay depositors. The Biden administration has also guaranteed uninsured deposits at both banks, while the Fed has announced a new lending program for all banks that need to borrow money.

The federal government’s response to the failure of Silicon Valley and Signature banks has already involved hundreds of billions of dollars, raising questions of who will end up paying for the aid. The Fed did not specify how many other banks had borrowed money, but stated that it expects the loans to be repaid.

The move to prop up First Republic Bank on Thursday, not by the government but under the auspices of the administration, highlights the political peril of the sudden crisis that erupted just over a week ago. President Joe Biden is in a difficult position, as he could be “damned if he saves the banks or damned if he doesn’t.”

The $30 billion cash infusion to First Republic Bank is the latest in a series of major industry interventions to stabilize the banking industry and demonstrate that it still has a solid foundation.