Why First Republic's $30 billion injection from big U.S. banks on Thursday isn't calming the stock market yet.
First Republic Bank’s $30 billion injection from America’s biggest banks to help shore up confidence in the California-based lender and the overall U.S. banking system isn’t yet a mission accomplished.
U.S. stocks continued to slide on Friday, with shares of financials under sharp pressure overall, but with shares of First Republic FRC down almost 30%, or 80% on the year so far, according to FactSet. Fear of unknown risks Wild swings in bank stocks this week and in Treasury yields, jitters about whether the Federal Reserve will keep raising its policy interest rate has left investors navigating one of the worst weeks of volatility since the 2008 global financial crisis.
He expects liquidity in the system to be reduced, consolidation in the banking system and for banks to clean up “their balance sheets of bad assets while raising additional capital.” Another $11.9 billion was borrowed through a new Bank Term Funding Program rolled out about a week ago by the central bank.
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