Barclays pre-approved offers slashed!

Daft_Monkey

Every now and then I tend to look at the pre-approved offers on Barclays' online banking. A couple of days ago I've noticed that my pre-approved loan limits have been reduced by 75% and the pre-approved overdraft limit has gone from £2500 over my current limit to just £100 and all that within a week. Has anyone else noticed anything similar? As my situation hasn't changed, is Barclays feeling the credit crunch?

Thomas_Crown

A report on www.thisismoney.co.uk 9/11/07:- ''Trading in Barclays shares was temporarily suspended today as panic sellng triggered a 10% slide amid rumours the bank was to unveil £4.8bn of credit crunch losses''.

gt94sss2

Daft_Monkey wrote: »

Every now and then I tend to look at the pre-approved offers on Barclays' online banking. A couple of days ago I've noticed that my pre-approved loan limits have been reduced by 75% and the pre-approved overdraft limit has gone from £2500 over my current limit to just £100 and all that within a week. Has anyone else noticed anything similar? As my situation hasn't changed, is Barclays feeling the credit crunch?

Many banks and credit card companies doing something similar to overdraft/unused cc limits

This is because new international accounting rules are coming into force which means that banks have to take account of the risk if all these unused limits were actually used.. thus leading to a reduction in the amount they can lend - before I think they didn't pay them that much attention.

Regards
Sunil

HugoSP

gt94sss2 wrote: »

Many banks and credit card companies doing something similar to overdraft/unused cc limits

This is because new international accounting rules are coming into force which means that banks have to take account of the risk if all these unused limits were actually used.. thus leading to a reduction in the amount they can lend - before I think they didn't pay them that much attention.

Regards
Sunil

Where did you obtain this information from?

gt94sss2

HugoSP wrote: »

Where did you obtain this information from?

If you google for Basel 2 (or Basel II) you can find out all about the new rules - I just know they are being introduced and make changes to the way banks need to deal with unused limits.

From an article in December 2003:

There remain some sticking points. As currently written, Basel II proposes unused lines of credit on credit cards be treated like actual outstanding balances on those cards, raising howls of protest from credit-card issuers. "The reality is that credit-card lines aren't contractually committed; banks can cancel or re-price them at any time," says Todd Thomson, CFO of Citigroup, the largest credit-card provider in the world.

You would need to read or ask someone who works in the finance industry (i.e. not me) exactly what was agreed in the end but I understand the new rules are basically designed to improve risk management in banks and will apply throughout Europe..

Regards
Sunil

M_Thomson

gt94sss2 wrote: »

If you google for Basel 2 (or Basel II) you can find out all about the new rules - I just know they are being introduced and make changes to the way banks need to deal with unused limits.

From an article in December 2003:

You would need to read or ask someone who works in the finance industry (i.e. not me) exactly what was agreed in the end but I understand the new rules are basically designed to improve risk management in banks and will apply throughout Europe..

Regards
Sunil

I think Basel II came in quite a while ago. I think the limits being slashed is more to do with interest rate rises and uncertainty with the economic performance of the country.

gt94sss2

Basel II is still being introduced - the process will take years globally..

Uncertainly in the performance of the economy, the 'credit crunch' and other factors don't help either..

Regards
Sunil