First Republic gets lifeline as banks back Yellen's plan

Jamie Dimon and Janet Yellen were on a call Tuesday, when she floated an idea: What if the nation's largest lenders deposited billions of dollars into First Republic Bank, the latest firm getting nudged towards the brink by a depositor panic.

Dimon was game and soon the chief executive officer of JPMorgan Chase & Co. was reaching out to the heads of the next three largest US lenders: Bank of America Corp., Citigroup Inc. and Wells Fargo & Co.

All month, the nation's banking giants have been raking in deposits from nervous customers at smaller firms and now those behemoths would be taking some of their own money and handing it to a San Francisco bank in distress, trying to stanch a widening crisis.

Over two days of frantic phone calls, meetings and some arm-twisting, the CEOS of 11 banks agreed to chip in a total of $30 billion for First Republic, promising to park the money there at least 120 days.

The hope is that's enough to save First Republic, known for its outsize business catering to tech executives. Or wealthy perhaps at the least, the cash will give the firm enough time to find another solution, such as a sale.

Such is the new-new-new line in the sand as the authorities in the US and Europe try to quell the Panic of 2023.