Regions: Financial Winner (Update 1)
Updated with market close information, the European Central Bank's expansion of eligible collateral and a discussion on Regions Financial.
NEW YORK (TheStreet) -- Regions Financial (RF) ended up the winner among the largest U.S. financial names on Friday, with shares rising 3% to close at $6.68.
The broad indexes all rose after the European Central Bank boosted available liquidity for eurozone banks, by lowering collateral requirements for its lending activities. The central bank's governing council "reduced the rating threshold and amended the eligibility requirements for certain asset-backed securities (ABSs)," thus broadening "the scope of the measures to increase collateral availability which were introduced on 8 December 2011 and which remain applicable."
The central bank also added ABS backed by auto loans, leases and consumer loans, as well as commercial loans "which have a second-best rating of at least 'single A' in the Eurosystem's
In addition, the central bank said it would accept residential mortgage backed securities and "securities backed by loans to small and medium-sized enterprises (SMEs), auto loan, leasing and consumer finance ABSs and CMBSs which have a second-best rating of at least 'triple B'", applying a 32% haircut to the CMBS and a 26% haircut to the other new "triple B" collateral.
The KBW Bank Index (I:BKX) rose over 1% to close at 45.09, with all 24 index components rising for the session, except for Capital One, which was down slightly, to close at $52.95. Capital One's shares have risen 25% year-to-date.
The banking sector had a strong showing following the announcement by Moody's Investor Service late Thursday of ratings downgrades for 15 "firms with global capital markets operations."
Credit Suisse analyst Howard Chen said on Friday that "the conclusion of yesterday's review removes a major overhang that has been weighing on the shares" of the largest U.S. banks, but added that "it's a modest negative" that Moody's "has kept the sector (holding company only) on negative outlook given the lack of clarity on