(New York) Eleven major American banks chose Thursday to come together to the rescue of the establishment in difficulty First Republic and thus prevent it from becoming the next domino to fall after three bankruptcies in a row.

They have pledged to make a total of $30 billion in deposits in First Republic. This is a sign, according to them, of their “confidence in the banking system” of the country, indicates a joint press release.

This action was welcomed by US authorities, the Ministry of Economy, the central bank and two financial regulators, saying in a separate statement that it “demonstrates the resilience” of the banking system.

The day had started badly for First Republic. After already losing 73% in a week, the stock lost as much as 36% after a Bloomberg report claimed the bank was exploring “strategic options” for its future, including a possible sale.

However, the stock recovered as rumors emerged of a possible joint intervention by the big banks. He finished up 12%.

First Republic, the 14th-largest U.S. bank by asset size, found itself struggling after the close proximity failures of Silicon Valley Bank, Signature Bank and Silvergate because it primarily serves wealthy customers.

Investors and analysts feared that many customers would prefer to move their money to establishments that a priori presented no risk of bankruptcy, because they were too big for regulators to let them close, and that First Republic would in turn have to be liquidated.

A grim prospect for confidence in the banking system as a whole.

The big banks have therefore decided to act in concert.

“The banking system has strong credit, ample liquidity, large capital and high profitability. Recent events have not changed this situation,” they said in their joint statement.

Bank of America, Citigroup, JPMorgan Chase and Wells Fargo, the country’s four largest banks by asset size, are expected to contribute $5 billion each.

Merchant banks Goldman Sachs and Morgan Stanley are to pay $2.5 billion each while BNY Mellon, PNC Bank, State Street, Truist and U.S. Bank are to pay $1 billion.

Founded in 1985 and headquartered in San Francisco, First Republic provides retail and corporate private banking and wealth management services, with offices primarily in California, but also on the East Coast (New York, Massachusetts, Connecticut , Florida), in the states of Oregon, Washington and Wyoming.

It has “an affluent clientele concentrated in coastal urban areas,” described Morningstar analyst Eric Compton in a note. And it has grown rapidly in recent years, growing from $22 billion in assets at the end of 2010 to $212 billion at the end of 2022.

But the profile of its clientele has recently become a weakness after the closures of banks that had bet on particular sectors of activity, the world of technology for SVB, that of cryptocurrencies for Signature Bank and Silvergate.

According to the agency S

Already closely watched for a few days, the bank had indicated on Sunday that it had “strengthened and diversified its liquidity” and had 70 billion dollars thanks to the facilities offered by the American central bank and to JPMorgan Chase.

Insufficient in the eyes of rating agencies S

By acting in concert, major U.S. banks want to illustrate “their confidence in First Republic and in banks of all sizes”, and demonstrate “their general commitment to helping banks serve their customers and communities”, it is written in their statement.