Barclays wants its money back

Stephen Beard Mar 15, 2007

TEXT OF STORY

MARK AUSTIN THOMAS: The crisis in the subprime mortgage market has created more ripples across the pond. The British bank Barclays is demanding the immediate repayment of more than $900 million from the troubled lender New Century. From London, Stephen Beard reports.


STEPHEN BEARD: Barclays has confirmed that it’s filed a notice of default against New Century.

The British bank says it does not expect to suffer significant losses, but this is a further ominous sign say analysts, an additional indication that the American subprime crisis has spread across spread across the Atlantic.

Andrew Hilton of the Centre for the Study of Financial Innovation:

ANDREW HILTON: I think what it is, is an example of just how tightly enmeshed the entire global financial system is now. Many of these loans have really ended up on the books of European pension funds, European insurers, even some of the German Landesbanks.

Several large British banks have a direct stake in the American subprime market. HSBC owns the largest subprime lender and recently set aside $10.5 billion to cover potential bad debts in the U.S.

In London, this is Stephen Beard for Marketplace.

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.