Wednesday March 19, 09:44 AM
HBOS rubbishes liquidity rumours
LONDON (ShareCast) - Mortgage lender HBOS (LSE: HBOS.L - news) has rubbished market rumours that it has had to request additional funding
from the Bank of England.The rumour that one large bank had asked the Bank for emergency funds sent shares across the bank sector tumbling this morning. HBOS shares shed 13% at one point before recovering. Bradford & Bingley (LSE: BB.L - news) and Alliance & Leicester shares were also sharply lower. HBOS told reporters it had an "exceptionally strong balance sheet" and continued to access wholesale funding when it needed to. Markets are jittery about bank finances because of the stagnation of the interbank market, with banks reluctant to lend to each other because of uncertainty over exposure to the US sub-prime problem. Libor, the wholesale interest rate that banks use when they lend to each other, has soared because of the lack of liquidity.
|
Send Article by Email
