The bank claimed it fell short of caah due to an error in its trade processing system, and it discovered the need for funding too late in the day to go to other banks for funding. But some are skeptical. For example, HousingPriceCrash notes
But traders have questioned the bank’s explanation, saying the loan was taken out at about 1100BST on Thursday – five hours before money markets shut and well before the problems hit the electronic trading system.
“When you add this to the senior resignations a week or so ago, you can understand why the stock is coming under pressure,” said Simon Denham, managing director of Capital Spreads. Edward Cahill, the man in charge of structuring debt investments at the bank’s investment arm Barclays Capital, unexpectedly resigned last week.
His sudden departure sparked panic that Barclays could be sitting on hefty losses as a result of the devaluation of these debt funds which are heavily tied to sub-prime US mortgages – well-known to be the key factor causing havoc in financial markets.