Some of the largest U.S. banks are planning to boost their reserves after contributing to an infusion of deposits in
First Republic Bank
last month, according to Bloomberg. It’s a sign the American banking system is still feeling some effects of the collapse of Silicon Valley Bank, even as the panic largely fades.
JPMorgan Chase
(ticker: JPM),
Wells Fargo
(WFC),
Citigroup
(C), and
Bank of America
(BAC) are planning to set aside about $100 million each, Bloomberg reported on Wednesday, citing people familiar with the matter. Each of the banks declined to comment when contacted by Barron’s.
The four banks each deposited $5 billion with First Republic (FRC) in March as part of a $30 billion lifeline designed to soothe fears and prevent contagion to the wider banking system.
Now the lenders are having to set aside some money for the potential risks associated with those deposits at First Republic due to accounting regulations, although the effect should be minimal.
The immediate panic caused by the collapse of Silicon Valley Bank last month appears to have largely been quelled, with deposits stabilizing at smaller U.S. banks. Shares in First Republic are down 88% this year so far and it is reportedly still considering its strategic options.
Write to Adam Clark at [email protected]
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