Barclays Takes a Drop in Share Price
According to an article published by Financial Times, Barclays suffered from a significant drop in share price. The reporter speculates the reason for this drop in the following excerpt:
Three names to scare you: Sheffield Recievables Corporation, Stratford Receivables Corporation and Surrey Funding Corporation; three ABCP conduits which Barclays runs, and has significant funding commitments to.
In the last reports available from the rating agencies, all three conduits boast high ratings and intricate credit protection arrangements. But all have very high exposure to the mortgage market - directly, through MBS, and through CDOs. Given what Moody’s have been doing with mortgage-related ratings in the past few days, it may be that Barclay’s conduits will suffer.
Which might go some way to explaining Barclay’s share price pain this morning. All three conduits buy securities from Barclay’s as well as other banks.
As the author R. L. Stine puts it: Reader beware, you’re in for a scare. It’s not enough to worry about which mortgage lenders are at risk. You have to know which companies are affiliated with which banks, and vice versa. With all this interdependency with companies exposed to risks, its no wonder people are becoming wary of the banks as well. Many in Utah have been taking out a Utah Home Equity loan as a means to preparing for possible disaster.
Comments
Leave a Reply
You must be logged in to post a comment.