Bank of England said to be reviewing Barclays’ handling of private credit loans
Source: The Guardian ·
Concerns financial contracts known as derivatives were incorrectly logged, potentially boosting Barclays’ profitsThe Bank of England is reportedly looking into Barclays’ handling of loans linked to the embattled private credit sector.The Bank’s regulatory arm, the Prudential Regulation Authority, started reviewing the matter earlier this year after concerns were raised by a Barclays insider,…
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The Bank of England is reportedly looking into Barclays’ handling of loans linked to the embattled private credit sector. The Bank’s regulatory arm, the Prudential Regulation Authority, started reviewing the matter earlier this year after concerns were raised by a Barclays insider, according to the Financial Times. The concerns related to the way Barclays logged the derivatives used to finance the loans it issues to private credit firms. Those derivatives – financial contracts that track the performance of an underlying asset – are said to have been logged in the wrong portfolio, indicating they were less risky than they actually were. That could mean the bank was not holding enough capital to cover potential losses, and could have boosted its profitability. Barclays is said to have built up billions of dollars’ worth of exposure to private credit loans using derivatives, according to sources cited by the Financial Times. The bank said in a statement: “Barclays takes seriously its…