By Lananh Nguyen and Saeed Azhar

(Reuters) -Citigroup Inc CEO Jane Fraser on Wednesday expressed confidence in U.S. banks after a series of closures rattled investors and fueled turmoil in global financial markets.

“The banking system is pretty sound,” and large and regional banks are well-capitalized, Fraser told the Economic Club of Washington D.C. on Wednesday.

“This is not a credit crisis. This is a situation where it’s a few banks that have some problems, and it’s better to make sure that we nip that in the bud,” she said.

In the past two weeks, two U.S. banks collapsed, Credit Suisse Group AG was taken over by Swiss rival UBS Group AG and America’s biggest lenders agreed to deposit $30 billion in beleaguered First Republic Bank. Fraser’s public comments were among the first by a large bank CEO since the tumult began.

Citi, the fourth-largest U.S. lender, was one of 11 major banks that threw a lifeline to First Republic last week in an effort to help it buy time for restructuring.

While Citi is not interested in buying First Republic, Fraser said, it contributed $5 billion to the lender as a mark of confidence – and expects to be paid back.

The move to shore up First Republic was an unprecedented show of unity among banking behemoths that are normally fierce competitors, she said.

“We usually try and kill each other in different deals that we’re trying to do,” Fraser said. “But in this instance, this is one where we’re in a strong position, we want to stop what could have been a problem.”

The rescue efforts failed to stop a 15% plunge in First Republic’s shares on Wednesday.

Elsewhere, the takeover of another ailing lender, Credit Suisse, by rival UBS on Sunday was not surprising, Fraser said.

“I don’t think anyone was falling off their chair that Credit Suisse ultimately ended up where it did, it was really a question of time,” Fraser said. “It’s been a troubled institution for a long time,” she said, citing management instability and various crises.

Scottish-born Fraser also spoke about her life and career in a wide-ranging interview with Carlyle Group Inc Co-Founder David Rubenstein. A travel buff with two college-age children, she is the first woman to lead a major Wall Street bank.

As an only child born to an accountant father, Fraser worked as a golf caddy in her youth before attending Cambridge University and Harvard Business School. Fraser started her career at Goldman Sachs Group Inc, then became a partner at McKinsey & Co and held several executive roles at Citi before taking the helm two years ago.

Fraser praised the quick action taken by U.S. regulators to stop the bank runs that toppled Silicon Valley Bank and Signature Bank earlier this month from spreading more broadly.

The Treasury, the Federal Reserve and the Federal Deposit Insurance Corporation invoked “systemic risk exceptions” that allowed them to guarantee billions of dollars of uninsured customer money.

“It’s very important to protect depositors,” Fraser said. “The banking system everywhere around the world depends on confidence, and that confidence has to be in the safety and security of deposits,” she said.

(Reporting by Lananh Nguyen and Saeed Azhar; Editing by Sonali Paul and Stephen Coates)

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