One of Britain's biggest banks Barclays is denying press reports it is in big trouble over failing US debt. Its share price suffered today despite Barclays hanging tough on claims it was in the hole to the tune of several hundred million euros. Barclays Capital, the banks investment arm, is known for innovation and taking risk, but it says the report on its exposure is "inaccurate".
It added it had only structured an investment vehicle for the failed German state bank Sachsen, and had not financed it. However analysts say Barclays needs to be more forthcoming with data if it wants markets to calm.
The crisis over subprime, or non-performing, loans in the mortgage sector in the US has hit the Dow Jones hard - over 800 points off its July peak today and no sign the run is over yet. People forced to sell their homes may lose jobs and shop less, and that would turn a financial problem into an economic one, ending US growth and squeezing sales and profits.
Europe worries this could feed over here, so any European finance house that has gambled on the US homes market may lose its shirt, creating a similar domino effect.
http://www.euronews.net/ |
