Martin Young4 hours agoNYCB stocks flip wildly as banks brace for end to fed bailoutsStock prices for the embattled lender have slumped 83% since the beginning of 2024, hitting an all-time low this week before rebounding.1777 Total views2 Total sharesListen to article 0:00NewsOwn this piece of crypto historyCollect this article as NFTJoin us on social networksInvestors in embattled New York Community Bancorp (NYCB) were taken for a wild ride on Wednesday after shares in the bank plummeted 42% before surging again after the announcement of a $1-billion lifeline from investors.
NYCB is an American regional bank with more than $100 billion in assets and is the bank that acquired the once crypto-friendly Signature Bank following its collapse in March 2023.
However, NYCB has seen a turbulent period after weaker-than-expected financial results in Q4, a reduction in quarterly dividends and concerns over potential losses from poorly performing loans in the commercial real estate sector.
Stocks in NYCB tumbled more than 42% to $1.76 on March 6 before trading was halted, pending news.
Hours later, trading resumed, and shares began to surge after it announced a strategic equity investment of more than $1 billion, reportedly supposed to “restore investor confidence.”
Share prices jumped to $4 before falling to $3.40 in after-hours trading.NYCB stock prices, YTD. Source: MarketWatch
“With the over $1 billion of capital invested in the bank, we believe we now have sufficient capital should reserves need to be increased in the future to be consistent with or above the coverage ratio of NYCB’s large bank peers,” said Steven Mnuchin, former Treasury Secretary and new NYCB board member, who led the capital injection.Fed banking bailout to end
NYCB’s rollercoaster of a day comes just a week before the Federal Reserve’s banking bailout program is set to end on March 11.
The Bank Term Funding Program (BTFP) was launched in March 2023 following several high-profile bank failures. Its aim was to make additional funding available to “eligible depository institutions” to help assure banks have the ability to meet the needs of all their depositors.
Related:BTC price to $1M? Bitcoin bulls dare to dream as NYCB hits 1990s levels
Since it launched, the U.S. central bank has dished out $164 billion to struggling banks, according to the St. Louis Fed.Federal Reserve bank funding. Source: St. Louis Fed
Additionally, Bitcoin (BTC) prices surged 40% in March 2023 when the BTFP was launched amid the U.S. banking crisis and the aftermath of the Signature Bank and Silicon Valley Bank collapses.
On March 7, angel investor and author Balaji Srinivasan commented on the banking calamity, comparing it to the financial crisis of 2008, which was caused by banks.“It’s just like 2008, where everyone was told the mortgage-backed securities were AAA. Except this time the new toxic waste is Treasuries themselves.”
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