New York Community Bancorp’s Rapid Expansion Has Exacerbated Risk, Banking Expert Says

Amid the jubilation following the news of $1 billion of committed investor capital, the troubled bank ignores the example of overleveraged foreign firms.

A screen displays the trading information for New York Community Bancorp on the floor at the New York Stock Exchange in New York on Jan. 31, 2024. Brendan McDermid/Reuters

The news that troubled New York Community Bancorp (NYCB) has secured the help of powerful investment firms and appointed a new CEO brought relief to many in the markets who feared that the financial institution might go the way of Silicon Valley Bank, Signature Bank, Credit Suisse, and other once-powerful players that have collapsed in recent years.

NYCB announced that Liberty Strategic Capital, Hudson Bay Capital, Citadel Global Equities, and other investment firms had agreed to commit to a total equity investment of $1 billion. After news of the deal broke, NYCB’s shares, which had fallen by double digits in the days prior, rebounded by nearly 30 percent.