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Barclays needs central bank loan
The loan is the second from the Bank of England this month
Barclays says that a "technical breakdown"
:in the UK's clearing system forced it to borrow £1.6bn from the Bank of England.
It is the second time this month that the bank has tapped into the central bank's emergency credit line, sparking antiestéticars it is facing a cash crisis.
But the UK bank insisted it was "flush with liquidity".
At the end of every day, banks such as Barclays have to settle their trades through the market settlement system.
Credit scrutiny
Typically, if borrowings are greater than their reserves at the end of the trading session, banks can borrow money from other banks to make up the difference.
But a malfunction in an electronic trading system on Thursday afternoon meant that Barclays discovered it had a shortfall too late to borrow from another high street bank.
The dramatisation of such situations is of no help to markets, their members or their customers
Barclays statement
Unable to get help in the wholesale market, Barclays had to turn to the Bank of England for a loan at a rate of 6.75%, which is 1% above its base rate.
High Street banks have gone to the Bank of England for such funding 14 times so far this year, but such transactions have come under greater scrutiny amid concerns about a lack of liquidity at some banks.
"Had there not been a technical breakdown, this situation would not have occurred," Barclays said in a statement.
"In these challenging times the dramatisation of such situations is of no help to markets, their members or their customers."
On 20 August, Barclays was forced to take out a £314m loan from the Bank of England after HSBC was unable to process a last-minute request for the money.
The loan is the second from the Bank of England this month
Barclays says that a "technical breakdown"
:in the UK's clearing system forced it to borrow £1.6bn from the Bank of England. It is the second time this month that the bank has tapped into the central bank's emergency credit line, sparking antiestéticars it is facing a cash crisis.
But the UK bank insisted it was "flush with liquidity".
At the end of every day, banks such as Barclays have to settle their trades through the market settlement system.
Credit scrutiny
Typically, if borrowings are greater than their reserves at the end of the trading session, banks can borrow money from other banks to make up the difference.
But a malfunction in an electronic trading system on Thursday afternoon meant that Barclays discovered it had a shortfall too late to borrow from another high street bank.
The dramatisation of such situations is of no help to markets, their members or their customers
Barclays statement
Unable to get help in the wholesale market, Barclays had to turn to the Bank of England for a loan at a rate of 6.75%, which is 1% above its base rate.
High Street banks have gone to the Bank of England for such funding 14 times so far this year, but such transactions have come under greater scrutiny amid concerns about a lack of liquidity at some banks.
"Had there not been a technical breakdown, this situation would not have occurred," Barclays said in a statement.
"In these challenging times the dramatisation of such situations is of no help to markets, their members or their customers."
On 20 August, Barclays was forced to take out a £314m loan from the Bank of England after HSBC was unable to process a last-minute request for the money.
