With fears and worries dominating of the next bank failure after Silicon Valley Bank (SVB), United States (US) banks are planning a rescue package of reportedly $30 billion for First Republic Bank.
With the San-Francisco First Republic shares falling on Thursday as the investors began to pull out their deposits, a group of Wall Street banks came to the forefront with a rescue plan to avoid another SVB-like situation.
A consortium of 11 US private banks including Bank of America, Citigroup and JP Morgan Chase announced that they would deposit $30 billion into First Republic, AFP reported.
Other banks including Morgan Stanley, Goldman America, and Wells Fargo is set to provide a lifeline to the First Republic.
"This action by America's largest banks reflect their confidence in First Republic and in banks of all sizes," the group said in a joint statement.
"Together we are deploying our financial strength and liquidity into the larger system, where it is needed the most," the banks said.
"This show of support by a group of large banks is most welcome and demonstrates the resilience of the banking system," said leaders of the Treasury Department, US Federal Reserve, Federal Deposit Insurance Corporation and Office of the Comptroller of the Currency in a joint statement.
In a statement, First Republic founder Jim Herbert and CEO Mike Roffler said the "collective support strengthens our liquidity position...and is a vote of confidence for First Republic and the entire US banking system."
The emergency measures were taken by the Federal Reserve and other US regulators to assure all depositors.
According to reports, the data made avaliable on Thursday showed the vastness of the emergency assistance, with the Fed drawing an additional $152 billion in short-term borrowing for banks from its standing loan window, reported AFP.
SVB collapse is considered the second biggest bank failure in the US history after Washington Mutual in 2008.