Another British Bank in trouble?

[Tiggs]

The City was swept by rumours today 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.

Northern Rock has borrowed only £18bn of the £23bn lent by the Bank of England from its emergency loan fund leading to speculation that other British banks need £5bn of extra funds to cope with the global credit crunch.

The Guardian's full article here:

And, an excerpt from Reuters:

" Barclays (BARC.L: Quote, Profile , Research) was the biggest percentage loser, tumbling 6 percent on market talk it was approaching the Bank of England due to funding worries and concern the company would lower its outlook.

Both Barclays and the Bank of England declined to comment."

[GreyWeather]

I'm glad China and Hongkong own my bank

[ships-cat]

Hmmm... seems rather speculative. It also seems like a 'bait and switch' article. It starts of talking about rumours of a bank borrowing from the Bank of England 'last resort' fund, and then diverts to talk of a lowering of Barcleys share prices. The clear implication is that Barcleys is borrowing from the BoE emergency fund. There is no connection between the two, and yet the journalist leads the reader into THINKING that there is, merely by juxtapositioning the two paragraphs.

Meow Purr.

Edited November 3, 2007 by ships-cat

[Tiggs]

Agreed. I think the speculation is largely based on the fact that the Barclay's share price took the largest downward plunge of Friday, while it seems that UK bank's across the board were down in share price.

[ifisurvive]

Not necessarily. Barclays had to actually borrow from the Bank of England a couple of time before Northern Rock had to (only) request the possibility of a loan. Link.

Obviously Barclays are a lot better at handling the press than NR...