Barclays Bank in TROUBLE!

[Mega]

They needed a £314 Million bale out just to keep going!
Mega

[Rajiv]

Re: Barclays Bank in TROUBLE!

The story from the Telegraph

When nerves are frayed it doesn't take much to make someone jump.

And if the markets are currently a horror movie, then Barclays' recourse to the Bank of England's credit facility on Monday was the equivalent of someone shouting "boo".

At any other time, nobody would notice. Yesterday, though, it sent a shiver down the City's spine.

Banks draw down on the BoE's emergency overnight facility on average about two or three times a month. The facility is there exactly because every now and then they get to the end of the day and find their books don't balance.

Because they are not allowed to have more liabilities than assets overnight, they are obliged to access the BoE credit facility. And because it is emergency money, they are charged punitive interest of one percentage point over the base rate - 6.75pc.

What appears to have happened in this case is that Barclays spotted it was £314m short a bit late in the day and tried to plug the hole with an interbank loan from HSBC.

The window for interbank loans shuts at 4.20pm and Barclays' application came too close to the deadline for HSBC to deliver the funds. Hence, it had no option but to go to the BoE.

[Mega]

Re: Barclays Bank in TROUBLE!

HSBC COULD NOT COVER IT!
How long till this crashes?
Mega

[Arnric62]

Re: Barclays Bank in TROUBLE!

I'm another "lost soul" from the UK. )

Some UK-based institutions have suffered significant losses as a result either of direct involvement in the American mortgage business, through buying dubious financial instruments that were ultimately secured on US mortgages, or through changes in the credit market brought about by the current panic.

The real fun will start, though, when our own housing market implodes - a process which seems possibly to be imminent. We have lower disposable incomes than Americans, higher per-capita debt, a housing stock that is even more over-valued by historic measures, an even higher proportion of non-traditional mortgages (the distinction between "prime" and "sub-prime" mortgages isn't quite the same here), and a Government which will be shackled in its ability to respond both by its own titanic indebtedness and by EU rules.

It's not going to be pretty.

[Spartacus]

Re: Barclays Bank in TROUBLE!

What stopped the crash that started then stopped 1.5 years ago - six months after the Edward Chancellor report that said the UK credit system had filled to the absolute brim and was going to spill out?

I thought that was the beginning of the end, prices dropped a little bit in UK and Australia but then resumed their rise.

I'm another "lost soul" from the UK. )

Some UK-based institutions have suffered significant losses as a result either of direct involvement in the American mortgage business, through buying dubious financial instruments that were ultimately secured on US mortgages, or through changes in the credit market brought about by the current panic.

The real fun will start, though, when our own housing market implodes - a process which seems possibly to be imminent. We have lower disposable incomes than Americans, higher per-capita debt, a housing stock that is even more over-valued by historic measures, an even higher proportion of non-traditional mortgages (the distinction between "prime" and "sub-prime" mortgages isn't quite the same here), and a Government which will be shackled in its ability to respond both by its own titanic indebtedness and by EU rules.

It's not going to be pretty.

[Mega]

Re: Barclays Bank in TROUBLE!

I'm another "lost soul" from the UK. )

Some UK-based institutions have suffered significant losses as a result either of direct involvement in the American mortgage business, through buying dubious financial instruments that were ultimately secured on US mortgages, or through changes in the credit market brought about by the current panic.

The real fun will start, though, when our own housing market implodes - a process which seems possibly to be imminent. We have lower disposable incomes than Americans, higher per-capita debt, a housing stock that is even more over-valued by historic measures, an even higher proportion of non-traditional mortgages (the distinction between "prime" and "sub-prime" mortgages isn't quite the same here), and a Government which will be shackled in its ability to respond both by its own titanic indebtedness and by EU rules.

It's not going to be pretty.

Are Yes, the "Joy" will start soon...........i wonder if i can get a Bank A/C in Hong Kong?
Mega

[Arnric62]

Re: Barclays Bank in TROUBLE!

What stopped the crash that started then stopped 1.5 years ago - six months after the Edward Chancellor report that said the UK credit system had filled to the absolute brim and was going to spill out?

I thought that was the beginning of the end, prices dropped a little bit in UK and Australia but then resumed their rise.

The housing market surged again after the Bank of England inexplicably cut interest rates in August 2005.

[Spartacus]

Re: Barclays Bank in TROUBLE!

So the earlier mini/aborted bust was not accompanied by a general realization that things cannot go on

Were there no news stories about mortgage fraud and people getting over-extended on their mortgages, and so on?

The housing market surged again after the Bank of England inexplicably cut interest rates in August 2005.