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Barclays asks for emergency funding (but no-one cares)
abaxas
Posts: 4,141 Forumite
I'm gonna ask a really stupid question here.
How-come Barclays have asked for emergency funding (bailout) twice in the last month but no-one bats an eyelid.
Where northern rock get access to the money, doesn't use it, and panic sets in.
Something definitely doesn't smell right. Anyone got the answer?
How-come Barclays have asked for emergency funding (bailout) twice in the last month but no-one bats an eyelid.
Where northern rock get access to the money, doesn't use it, and panic sets in.
Something definitely doesn't smell right. Anyone got the answer?
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Comments
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Apparently NR's business model is holed below the water-line in circumstances where no one will buy their mortgage debt and they can't re-finance at cheap rates.
Mortgage debt packages are currently highly suspect - see subprime.
Inter-bank exchange rates are high and getting higher.
In short, they are dead men walking. Someone will take them over.anger, denial, acceptance
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AIUI Barclays got an overnight loan to ease liquidity problems - normally they'd get this from another bank, but no-one wanted to lend it to them so they went to the BoE.I'm gonna ask a really stupid question here.
How-come Barclays have asked for emergency funding (bailout) twice in the last month but no-one bats an eyelid.
Where northern rock get access to the money, doesn't use it, and panic sets in.
Something definitely doesn't smell right. Anyone got the answer?
NR have an openended facility to borrow as much as they need over as long as they need from the BoE."Mrs. Pench, you've won the car contest, would you like a triumph spitfire or 3000 in cash?" He smiled.
Mrs. Pench took the money. "What will you do with it all? Not that it's any of my business," he giggled.
"I think I'll become an alcoholic," said Betty.0 -
Barclays needed money only overnight, but NR needs money on a much longer term.0
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as mikael says barclays was a very very very short term cash flow problem.
Northern rock asked the boe as a 'last resort' as no other bank would lend them the money.
I have to say the big hoo-haa about it all, is pointless. They are a very asset rich company. The savers withdrawing by the thousand are not helping the situation.
I have a loan with northern rock and my current account is with barclays, but not botehred about it all really. It will soon die down0 -
Savers' deposits are guaranteed to the extent of 90% of savings up to £18,000. It's a depositor protection scheme and all banks and building societies have to deposit a certain amount of money with the BoE to cover any savers of any failing bank or building society.:snow_grin"Let it snow, let it snow, let it snow........":snow_grin0
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anger, denial, acceptance0
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