The Dow Jones entered positive territory, so on Thursday it was announced that a group of large US banks, such as JP Morgan, Goldman Sachs or Morgan Stanley, among others, deposited 30 billion dollars to rescue the First Republic.

Details of the deal were discussed with regulators in Washington. These large banks receive billions of dollars in flow from mid-sized lenders. The injection is structured so that the banking giants return part of the money they have from First Republic customers.

Analysts pointed out that this will prevent the stock market crash and deposit flight, but it will still have to deal with a complex business context with high interest rates and the sudden awareness by depositors of the pitfalls that exist for uninsured balances. It will bring calm, although there are long-term doubts.

First Republic, the 14th-largest U.S. institution by assets, exemplifies the threat looming over regional banks after the collapses of Silicon Valley Bank (SVB) and Signature last week.

Medium or small entities that specialize in sector clients are not on the too big to fail list. But they are very vulnerable to financial panic and are the concern for the account holders in these banks.

This feeling did not dissipate, despite the fact that Janet Yellen, Secretary of the Treasury, tried to offer guarantees this Thursday in her appearance in the Senate.

“The banking system remains solid”, he stressed. “Americans can trust that their deposits will be there when they need them,” he insisted.

Although the investigation has yet to be concluded, he made it clear that there was a danger of a lack of liquidity that could lead to “exceptional systemic risk”, in his words.

Yellen defended the measures taken by the Government to stabilize the financial system. “We recognized that there was a possibility of a situation of contagion and other banks could fall into the same situation”, he remarked. However, the fall of SVB and Signature, members of this group of medium or small lenders, continues to reverberate.

Investors feel the framework could falter if uncertainty causes clients to decide to take their money to bigger, safer institutions.

The recent collapse of the two entities made customers start to scrutinize that other banks of this type could be next to fall.

In reality, middle banks emerge as the black hole in the system. For years, these entities argued that they had been unfairly burdened by regulation passed in the wake of the 2008 financial crisis.

This culminated in a 2018 law signed by President Trump, which had the support of some Democratic lawmakers. This deregulation relaxed the controls of the Federal Reserve (Fed). Until then, surveillance was very strict from assets of 50,000 million, a ceiling that was raised to 250,000 million.

Yellen stressed that the requirements for these banks dependent on uninsured deposits must be reviewed. Bank tests focus on capital and not liquidity, he said. And he said that “we need to analyze what has happened and reflect on the rules”.