Is £4 Billion Enough For Barclays?
As talks appear to be nearing a close it seems that Barclays Bank may soon be announcing a fund raising of £4 billion from a select number of institutional investors. As we have covered on this site over the last few days the move is seen by many as a turning point for the group, putting finances back on a more steady footing. However, there is a growing feeling that £4 billion may not be enough.
While some analysts are perhaps missing the point that the £4 billion fund raising may well bring closer ties with banking corporations around the world, there are concerns that the Barclays balance sheet may suffer in the event of a further slowdown in the economy. The current situation at the moment is bizarre with inflation rampant but consumers struggling to make ends meet. The housing market is also falling sharply and expected to continue downwards for some time.
The recent rumoured rescue package for Barratt Developments was well received but could the UK banks afford to bail out many more companies in a similar situation? Whether it is deferring interest payments or lending money to companies to see them through difficult times, these are not top quality investment proposals and do put yet more pressure on balance sheets.
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