Saturday, November 3, 2007

Is Barclays, RBS or A&L now in trouble ?

City fears second bank is heading for credit crisis

The City was swept by rumours yesterday that another British bank was in trouble after Northern Rock indicated it was not the only bank borrowing from the Bank of England's rescue fund. Barclays was yesterday the subject of intense speculation in the City after its share price sank by 6% as investors worried about its financial stability. Other banks, including Royal Bank of Scotland and Alliance & Leicester, also suffered large falls in their share prices as the City share dealers scouted around for the most likely candidates.

Posted by uncle chris @ 10:41 AM (2311 views)
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8 thoughts on “Is Barclays, RBS or A&L now in trouble ?

  • The Guardian is saying it is Barclays.

    Allegedly.

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  • nope not barclays they are a safe one….

    Look at B&B

    bit of a red herring this one..it is now rumours they would like you to hear not what is really happening..

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  • Correct me if I’m wrong but isn’t Barclays supposed to be the biggest bank in the UK? If Barclays are in trouble then doesn’t that imply that our national banking system is at risk of a collapse in confidence? Credit problems at the banks should result in lower house prices, eventually, but at a terrible price for our economy.

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  • a large bank is reported by the BBC to be holding an emergency board meeting on a sunday! hold the yorkshire pudding………….

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  • “Stockbroker analysts said the bank was busy paying cash to its shareholders in the form of a share buy=back programme, which would be hard to justify if it was borrowing from the Bank of England at a penal rate.”

    Well its not clear in anyway that this is the case. Most things are pure speculation at the moment.

    However, to remove the point to one of total theory. Passing money to shareholders whilst borrowing in an emergency situation…. ‘hard to justify?’ erm. OK i am not a lawyer. Nor am i from the enforcment agency of the Serious Fraud Office or the banking regulator .. so i cannot really comment.

    It would seem very strange. very, very strange. Lets just leave that one aside for now.

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  • What happens now if a run on Barclays starts, will tweedle dee & Tweedle dumb bail them out at our expense?

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  • The reason HBOS dropped its leadership among mortgage companies was its reluctance to give loans to less than perfect borrowers. As a result, Northern Rock, A&L and B&B in recent years took a higher percentage of “adventurous” loans, with B&B happy to give 110% loans without robust checks untill the crunch came. As result, the slow and steady growth of HBOS with more reliable borrowers should give better internal stability in difficult times. HBOS are also very good at dealing with mortgage defaulters as they happen (I know one of their debt advice experts who also works for a local charity).

    I think the quality of their borrowing base is one of the best in the industry, so the share price drop of HBOS was perhaps a little overdone, and HBOS are less likely to be the (rumoured) subject of this article.

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  • Hi, well I think that considering the HSBC has lost greater than expected losses, the rest of the banks will follow suit. It just so happens that RBS is the first in line. It may mean that banks will stop giving mortgages/loans for the short term, but what I want to know is when will the real decisions be made? The decisions as to increase taking risks on consumers (who by the way have no money because they are losing their jobs) in the form of loans, or the decision to lower their borrowing rate. I think its about time the banks do lower the borrowing rate, they have been ripping the consumer off for years.
    I think the irony of the situation lies with the relationship between the banks and the builders. The banks were ever so ready to side with the lack of vision of the builders – I mean seriously were going to play economics with builders? And the builders were acting like junkies ready to take money off the banks and so now we have the sub-prime era, which by the way I think is quite amusing as the builders have no idea what to do and the banks (for a change) aren’t in any position to do anything about it.
    The best thing to come out of this would be the banks to lose serious profits, pay themselves less, lower their borrowing rate and end their love affair with numb builders and of course for the builders to get back to their real trade which is building quality structures and leave the economics to us the customer.

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