House Financial Services Committee Chairman Patrick McHenry is among those welcoming banks’ support of First Republic Bank.
The congressman said in a Thursday (March 16) press release that the announcement by 11 banks that they will make deposits at First Republic to boost its liquidity should provide confidence in the banking system and that he is glad to see it done without government intervention.
“This is how our free market should operate,” McHenry said in the release. “At a time of uncertainty, bank managers and supervisors must be laser focused on controlling risk to bolster the security and resiliency of our financial system. Responsible leaders should reinforce the public’s confidence in our financial system, rather than pushing their preferred agenda.”
McHenry’s statement followed Thursday’s joint announcement by 11 large U.S. banks that they are making uninsured deposits totaling $30 billion into First Republic Bank.
The move ensures the bank has the liquidity it needs, reflects the 11 banks’ confidence in First Republic and in banks of all sizes, and shows the importance of regional, mid-size and small banks, the announcement said.
Of the 11 banks, Bank of America, Citigroup, JPMorgan Chase and Wells Fargo each deposited $5 billion. Goldman Sachs and Morgan Stanley both deposited $2.5 billion and BNY Mellon, PNC Bank, State Street, Truist and U.S. Bank each deposited $1 billion.
The banking giants’ effort to save their smaller contemporary came after reports that First Republic was considering a sale as well as options to enhance its liquidity.
The banks’ action was also welcomed by a joint statement issued Thursday on behalf of the U.S. Department of the Treasury, Federal Reserve, Federal Deposit Insurance Corporation (FDIC) and Office of the Comptroller of the Currency (OCC).
“This show of support by a group of large banks is most welcome, and demonstrates the resilience of the banking system,” the statement said.
McHenry also said in his statement that the House Financial Services Committee is in contact with regulators and is monitoring the ongoing situation.
“We will ensure any bad actors are held accountable, while providing transparency for the American people,” McHenry said in the release.
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