Key Takeaways
- • Barclays said its £15 billion ($19.97 billion) private credit exposure was treated in line with accounting and regulatory capital requirements, responding to a Financial Times report that the Bank of England was examining whether its traders misrepresented illiquid private credit loans.
- • Barclays put the mark-to-market value of its loan total return swap exposure linked to private credit assets at about £300 million, based on roughly £1.5 billion of underlying notional assets.
- • The bank said the vast majority of its total private credit exposure is held in the banking book, and that conditions for classifying the swaps under the trading book had been met, supported by internal governance and external advisers.
Summary
Barclays on Monday defended its £15 billion ($19.97 billion) private credit book after the Financial Times reported earlier in the day that the Bank of England was examining whether Barclays traders had misrepresented illiquid private credit loans, according to Reuters. In a statement to Reuters, the bank said its treatment of total return swaps was consistent with accounting and regulatory capital requirements.
Barclays said the mark-to-market value of its exposure to loan total return swaps linked to private credit assets was about £300 million, based on roughly £1.5 billion of underlying notional assets. The bank said the vast majority of its total private credit exposure of £15 billion is held in the banking book.
Under capital rules, classifying the treatment as trading book required certain conditions to be met. Barclays said those conditions had been satisfied and were supported by internal governance and external advisers. The report of BoE scrutiny is the central fact in the story; Reuters' reporting did not include a regulator response or any finding by the Bank of England.
(Reporting by Sri Hari N S; Reuters conversion rate of $1 = 0.7512 pounds.)
Barclays said the mark-to-market value of its exposure to loan total return swaps linked to private credit assets was about £300 million, based on roughly £1.5 billion of underlying notional assets. The bank said the vast majority of its total private credit exposure of £15 billion is held in the banking book.
Under capital rules, classifying the treatment as trading book required certain conditions to be met. Barclays said those conditions had been satisfied and were supported by internal governance and external advisers. The report of BoE scrutiny is the central fact in the story; Reuters' reporting did not include a regulator response or any finding by the Bank of England.
(Reporting by Sri Hari N S; Reuters conversion rate of $1 = 0.7512 pounds.)
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