New York Community Bancorp, Inc, the New York based community bank's stock fell more than 60 % in the past week on possible problems with its commercial real estate portfolio.
New York Community Bancorp won the bidding for Signature Bank's assets. However, the Federal Reserve is soon stopping its specialty low-interest loans to distressed lenders program, which was established after the regional banks' crisis in March 2023.
Now, judging by the opening calls on regional banks' stocks we are in for a relatively contained repeat of the regional banks' crisis from last year. There are problem real estate loans in the US banking sector, especially in the regional banks' loan books.
But the problem will be relatively contained, according to Wolfteam Ltd.'s view. In any case, the Federal Reserve will step in with a money line to many troubled banks, especially regional ones if things get out of control.
However, some vehicle to clean bad real estate loans from the regional banks' books could prove timely.
The financial contagion problems resulting from New York Community Bancorp's problems will prove contained, according to Wolfteam Ltd.'s projections and estimates.
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