Bank of America (BAC), Goldman Sachs (GS), Citigroup (C) and other major banks saw their stocks soar Wednesday after the Federal Reserve and central banks promised to flush the global financial system with liquidity to ease pressures on the European financial markets.
Bank of America (BAC), Goldman Sachs (GS), Citigroup (C) and other major banks saw their stocks soar Wednesday after the Federal Reserve and central banks promised to flush the global financial system with liquidity to ease pressures on the European financial markets.
Still, it has been a volatile week for big banks, with ratings giant Standard & Poor’s downgrading its ratings on 15 banks Wednesday.
Bank of America, The Bank of New York Mellon (BK), Citigroup (C) Goldman Sachs (GS), Morgan Stanley (MS) and Wells Fargo (WFC) were among the firms to see their issuer credit ratings pushed down a notch by S&P.
At the same time, S&P upgraded two major financial firms and affirmed another 20 bank ratings.
Despite the downgrades, the banks experienced an unexpected stock price surge Wednesday morning when the Fed confirmed its intention to improve the situation in Europe.
The Fed released a statement, saying, “These central banks have agreed to lower the pricing on the existing temporary U.S. dollar liquidity swap arrangement by 50 basis points so that the new rate will be the U.S. dollar overnight index swap rate plus 50 basis points.”
Write to Kerri Panchuk.
