US banks announce a 30 billion rescue package to prevent the first republic bank from going down.
Eleven of the biggest banks in the U.S.A announced a resume package of 30 billion dollars for the First Republic Bank on Thursday. This was done to prevent the California-based bank from becoming the third bank to fall this week.
First Republic Bank serves a similar client base as Silicon Valley Bank suffered a crisis after the depositors withdrew 40 billion dollars. The First Republic Bank which had deposits totalling 176.4 billion dollars might suffer a similar downfall.
The group of banks confirmed that many unnamed banks had seen a large number of withdrawals amounting to 2,50,000 USD of uninsured deposits. The shares of the First Republic Bank dropped by more than 60 per cent on Monday, even after the bank had secured funding from JPMorgan and Federal Reserve.
As per the latest report, Credit Suiss’s market value had taken a blow this week as reported by the news agency AFP. Credit Suisse shares closed down by over 30 per cent. The value of dollars flipped on Thursday, on the other hand, other riskier countries earned some gain after the market improved.
The antipodean currencies are shunned in times of risk aversion. The Aussie jumped 0.79% to $0.6710 in Asia trade on Friday while the kiwi rose .67% to $0.62375% as reported by Reuters. While the Swiss franc rose 0.3%.
Table 1.0 Rise of the Antipodean currencies
The data given in the table describes the rise of antipodean currencies(northern hemisphere countries) during the economic crisis
On Thursday the bank’s shares were down by 36 per cent but the rescue package was able to control the downfall of the bank. Morgan Stanley and Goldman Sachs deposited 2.5 billion dollars in the bank. The remaining USD 5 billion consist of contribution from BNY Mellon, State Street, PNC Bank, Truist and US Bank which amounted to 1 billion USD.
America’s largest banks have confidence in the country’s banking system. The statement of the banks reflects their belief in the country’s banking system. The nation’s banking regulators stated support for the rescue package. Support by a group of large banks demonstrates the support and resilience of the banking system. Treasury Secretary Janet Yellen, Acting Comptroller of the Currency Michael Hsu, Federal Reserve Chair Jerome Powell and FDIC Chairman Martin Gruenberg.
The fall of Silicon Valley Bank and New-York based Signature Bankhad revived the memories of the financial crisis of the United States IN 2007-2009. The federal government moved the bank’s deposits even exceeding the 2,50,000 USD limit per individual account.
Edited By:Kavya Venkateshvaran
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