Steps to increase reserves from major banks

In the US, some of the major banks that deposited a total of $30 billion in deposits to First Republic Bank for at least 120 days in order to calm the markets and give the bank a breather last month are preparing to increase their reserves, according to sources familiar with the matter. Sources speaking to Bloomberg said that the banks that deposited the largest amounts of deposits to the bank are considering setting aside $100 million each. During the period in question, JPMorgan, BofA, Citi and Wells Fargo each deposited $5 billion; Goldman Sachs and Morgan Stanley each deposited $2.5 billion; and PNC, BNY Mellon, Truist, US Bancorp and State Street each deposited $1 billion. The two sources stated that this step would be taken due to accounting rules aimed at ensuring that sufficient reserves are set aside against possible losses. The cash injection to First Republic was a step to reassure the banking system, with major bank executives expecting to receive their deposits back in full. Still, the move to set aside reserves showed that these banks' decision to deposit money with First Republic was not without risk.