Eleven banks rescue First Republic Bank with $30 billion in uninsured deposits

Yahoo Finance crypto reporter David Hollerith joins Yahoo Finance Live to discuss the rescue plan for First Republic Bank.

Video Transcripts

And let’s take a look at First Republic, which is trading lower in after hours after the market closed following the announcement that 11 of the nation’s largest banks are depositing $30 billion in the bank. Yahoo Finance’s David Hollerith has been following the story. David, what can you tell us?

DAVID HOLLERITH: Well, so, Ines, the deal is, you know, almost a dozen of the nation’s largest banks– and it’s sort of broken down in terms of what they’re putting into this deal to First Bank. Bank of America and JPMorgan are putting in– are putting in about $5 billion a piece. Goldman Sachs and Morgan Stanley are each depositing $2.5 billion, while US Bancorp, Truist, PNC, State Street, and Bank of New York Mellon are each putting in $1 billion.

So these deposits are uninsured and they’re supposed to stay with First Bank for at least 120 days. And obviously, this is an effort to shore up First Bank. You’ve been covering this story all week, you know, as the stock has clearly been taking, you know, record hits, at least over the last week ever since Silicon Valley Bank has failed. And, you know, I think this is, like, a very interesting thing compared to the 2000– or the 2008 to 2009 financial crisis in that JPMorgan stepped in and bought many banks during that period.

And this is much more of a group effort of, you know, what we have right now is– more banks could potentially come in, but we have 11 of the largest banks in America essentially trying to help the 14th largest. And that’s kind of interesting from a competition standpoint. And Treasury Secretary Janet Yellen also commented on this. And we have said that the CEO of JPMorgan, Jamie Dimon, and the Treasury Secretary met today.

So, you know, we don’t have a full picture of what led to this exactly and what this means. But it’s definitely– it’s an enormous effort to see something like this. And I think, you know, we’ll want to hear more about what this means and obviously what happens tomorrow when the markets open again.

And we will be watching. First Republic right now. The stock is down 13% in after hours. David Hollerith, thanks so much for joining us.

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