Barclays: It’s all gonna be OK

Stephen Beard Aug 31, 2007

TEXT OF STORY

Doug Krizner: This morning, the British bank Barclays is reassuring investors about its financial stability. Barclays was forced to borrow emergency funds this week from Britain’s central bank. From London, Stephen Beard reports.


Stephen Beard: Barclays says it asked for the Bank of England’s emergency cash because of a breakdown in the money market settlement system. It borrowed $3.2 billion.

It’s not unusual for commercial banks to seek the central bank’s help in this way, and Barclays, which has assets worth more than a trillion dollars, insists it’s not in financial trouble.

But this is the second time this month that Barclays has needed assistance. Peter Thal Larsen of the Financial Times says that is embarrassing.

Peter Thal Larsen: Investors are incredibly nervous and are really looking for any signs that people might be running into problems. And so the last thing you really want to be doing in these circumstances is to be going to borrow from the Bank of England.

Barclays has been affected by the meltdown in the U.S. subprime mortgage market. A senior executive quit suddenly last week. But Standard & Poor’s, the rating agency, says Barclays’ subprime losses are likely to be limited.

In London, this is Stephen Beard for Marketplace.

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