Barclays share prices fall

Rumours surrounding emergency loans allegedly taken out by Barclays Bank from the Bank of England have resulted in the bank’s shares taking a tumble. The UK banking giant recently saw its shares fall to their lowest level in two and a half years. In August rumours began when the bank is said to have taken two emergency overnight loans from the Bank of England. The bank has defended its actions, stating that the loans were due to technical difficulties, but with the crisis that hit Northern Rock still fresh in the minds of many it was inevitable that Barclay’s actions would eventually affect its share prices.

Barclays Bank officials have denied that they have any long term funding problems, and in order to try and reassure consumers the bank’s head of global retail and commercial banking, Frits Seegers, purchased £700,000 worth of Barclay’s shares last week. At one stage share prices fell by around 8% but later recovered a little. One industry official stated: “There are concerns about writedowns and everything else, but the comments Barclays have made to date suggest that is not an issue, as does the fact they are still buying back their own shares.”

Northern Rock’s shares plummeted by over 80% at one point, as the crisis took hold and savers withdrew billions of pounds of their money from the stricken bank. More recently the Alliance and Leicester has found itself having to try and reassure consumers after its share prices fell, with many wondering whether it is heading the same way as Northern Rock. However, officials from the Alliance and Leicester have stated that they have not got funding issues, and have managed to raise necessary funding every week throughout the credit crisis that has spread across the banking and financial industry.

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