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Second emergency loan for Barclays

Barclays has taken out its second emergency loan from the Bank of England in the last two weeks.

The bank has confirmed that it borrowed £1.6bn from the BoE last Wednesday due to a “technical breakdown” in the UK clearing system.

Barclays received a £314m emergency loan two weeks ago through the BoE’s standing lending facility, which allows banks to borrow sums at a penalty rate of 6.75 per cent.

Barclays claims in a statement that it is flushed with liquidity, despite concerns that it is facing a cash crisis. It says: “At the end of the day, there was excess liquidity in the money-markets where bank reserves were larger than bank borrowings. There are no liquidity issues in the UK markets. Barclays itself is flush with liquidity.

“Had there not been a technical breakdown, this situation would not have occurred. In these challenging times, the dramatisation of such situations is of no help to markets, their members or customers.”

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