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Eleven major banks in the US have agreed to a $30 billion bailout plan for First Republic Bank to prevent it from collapsing and to prevent a widespread banking crisis.
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First Republic Bank and Silicon Valley Bank had a similar customer base, and Silicon Valley Bank collapsed on Friday after depositors withdrew about $40 billion in a few hours.
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The rescue plan, which involves contributions from several major banks, is viewed as a safeguard against potential bank runs in the future.
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The $30 billion in uninsured deposits by First Republic Bank is seen as a sign of trust, given the bank's successful enterprise before the previous week.
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The banks stepped in to assist a competitor, which is noteworthy since Silicon Valley Bank failed because its closest and most loyal customers withdrew their funds at the earliest sign of difficulty.
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The banking regulatory authorities of the US issued a statement commending the rescue plan, and the federal government took action to safeguard all bank deposits, even those exceeding the FDIC's $250,000 limit per individual account.