Barclays tapped the Bank of England for emergency overnight funds twice last month at the central bank’s penalty rate of 6.75 percent, which is 1 percentage point higher than its benchmark rate, Bloomberg reports.
On Aug. 20, it borrowed 314 million pounds ($631 million) to backfill a loan from HSBC Holdings Plc that had gotten delayed for unspecified reasons.
Barclays has to settle their trading through the market settlement system, this means that if borrowings are greater than reserves then banks can borrow money from others to settle the balance.
Last week, it asked the central bank for as much as $3.2 billion (1.6 billion). A malfunction meant that Barclays had a shortfall too late to be able to borrow from another bank meaning that they had to ask the Bank of England.
“In these challenging times the dramatisation of such situations is of no help to markets, their members or their customers,” says Barclays.