Bank AI

Wednesday

Bitcoin

when

Reserve

Investors 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.&nbsp;
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 <a href="https://cointelegraph.com/news/signature-bank-closed-by-new-york-banking-authorities">collapse in March</a> 2023. 
However, NYCB has seen a turbulent period after <a href="https://cointelegraph.com/news/nycb-stock-down-40-percent-quarterly-report-260-million-loss">weaker-than-expected financial results</a> 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, <a href="https://twitter.com/kobeissiletter/status/1765429441788776586" target="_blank" rel="noopener nofollow">reportedly</a> supposed to “restore investor confidence.”
Share prices jumped to $4 before falling to $3.40 in after-hours trading. 
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-03/0ccd3c71-fa05-413c-84aa-7dc0f0b635c0.jpg" alt="" title="">
 <figcaption style="text-align: center;">
 NYCB stock prices, YTD. Source: MarketWatch
 </figcaption>
</figure>
“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.
<h2 id="fed-banking-bailout-to-end">Fed banking bailout to end </h2>
NYCB’s rollercoaster of a day comes just a week before the Federal Reserve’s banking bailout program is <a href="https://www.frbservices.org/news/communications/022024-ending-bank-term-funding-program" target="_blank" rel="noopener nofollow">set to end</a> 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: <a href="https://cointelegraph.com/news/btc-price-1m-bitcoin-bulls-dream-nycb">BTC price to $1M? Bitcoin bulls dare to dream as NYCB hits 1990s levels</a>
Since it launched, the U.S. central bank has dished out $164 billion to struggling banks, <a href="https://fred.stlouisfed.org/series/H41RESPPALDKNWW" target="_blank" rel="noopener nofollow">according</a> to the St. Louis Fed. 
<figure data-ct-non-breakable="true">
 <img src="https://s3.cointelegraph.com/uploads/2024-03/6746fd0e-f713-4394-88ea-e41c105f2c68.jpg" alt="" title="">
 <figcaption style="text-align: center;">
 Federal Reserve bank funding. Source: St. Louis Fed
 </figcaption>
</figure>
Additionally, Bitcoin (<a href="https://cointelegraph.com/bitcoin-price">BTC</a>) prices surged 40% in March 2023 when the BTFP was launched amid the U.S. <a href="https://cointelegraph.com/news/banking-crisis-what-does-it-mean-for-crypto">banking crisis</a> and the aftermath of the Signature Bank and <a href="https://cointelegraph.com/news/silicon-valley-bank-collapse-everything-that-s-happened-until-now">Silicon Valley Bank</a>&nbsp;collapses.
On March 7, angel investor and author Balaji Srinivasan <a href="https://twitter.com/balajis/status/1765440858403537196" target="_blank" rel="noopener nofollow">commented</a> on the banking calamity, comparing it to the financial crisis of 2008, which was caused by banks. 
<blockquote data-ct-non-breakable="true">
 “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.”
</blockquote>
Magazine: <a href="https://cointelegraph.com/magazine/unstable-coins-de-pegging-bank-runs-other-risks-2023/">Unstablecoins: Depegging, bank runs and other risks loom</a>

NYCB stocks flip wildly as banks brace for end to fed bailouts

Table of Contents

Cointelegraph

Other articles published on Mar 7, 2024

Arizona Senate Wants State Pensions To Consider Adding Bitcoin ETFs To Portfolios

$BTC Bulls Rotating Into $ETH; This ERC-20 Memecoin Could Spike Massively

The Potential Wormhole Airdrop Guide: How to Check for the $W Token Airdrop?

Analyst Forecast Ignites a New Era for SAND in the Crypto Metaverse: Report

Renowned Analyst Doctor Profit Predicts Bitcoin Surge Beyond 100K After Halving

Ethereum Hits $3,800: Dencun Upgrade and ETF Hype Propel Surge

Join our free newsletter for daily crypto updates!