In comments to the previous post, it was suggested that any bank seen taking Bank of England emergency lending would be committing stock-market suicide. Is this right ? On the one hand, Northern Rock is certainly in a bad way – but this did not start with a BoE bail-out.
On the other hand we have Barclays, which on 31st August admitted it had needed some short-term £££ from the Bank “after a failure in a trading system” on 29th. It then transpired this was the second such call it had made in less than two weeks, which starts to look careless. Has this hurt Barclay’s share price ?
I’m not sure. Firstly, compare Barclays with another Aa1-rated bank, RBS. Their share prices have tracked each other quite closely since the start of the recent turmoil. In fact, RBS has lost slightly more value over this period. The one time Barclays dipped noticeably lower was on 28th August when it announced its exposure to the sub-prime market.
Now compare Barclays to Lloyds-TSB, the
Unsurprisingly, Lloyds has done better - but by no more than might be explained by its higher credit standing (and perhaps a tad for Barclays’ “systems” failings).
Any other data or views ? (too many numbers ?!)