Barclays credit rating notched down
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Stacey Vanek-Smith: Bad news from Barclays is dragging on the Footsie this morning. Moody’s has cut its long-term credit rating on the British banking giant. The agency says it expects the bank to suffer further significant losses from its toxic assets. From London, Stephen Beard reports.
Stephen Beard: It had all been going so well for Barclays. Last week, its board came out and said the bank was doing just fine. In spite of all the expected write-downs, it was still making good money. Barclays shares shot up by 73 percent as a result.
But now Moody’s says, “Hang on a minute.” The agency has lowered its rating on Barclays by two notches.
Justin Urquart-Stewart is with Seven Investment. He says the trouble is there are doubts about Barclays and its American mortgage-backed securities:
Justin Urquart-Stewart: All we do know is they were significantly involved in a lot of the subprime areas. But to what extent they are going to have to write elements off, well at the moment, we just don’t know. But what Moody’s ratings are telling is, it doesn’t look like good news.
Moody’s also says that Barclays could see a sharp rise in bad debts at home as the British recession deepens.
In London, this is Stephen Beard for Marketplace.
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