IT breakdown forces Barclays to borrow from Bank of England

Barclays Bank and Euroclear have refused to give details of the technical breakdown that forced the bank to borrow from the Bank of England's emergency reserves this week to cover a shortfall in its finances.

Barclays Bank and Euroclear have refused to give details of the technical breakdown that forced the bank to borrow from the Bank of England's emergency reserves this week to cover a shortfall in its finances.

Barclays said there would have been no need to borrow the money if it had not been for a technical breakdown in the system used by banks to clear and settle moneymarket transactions.

Euroclear's CrestCo, which settles trades in London, said in a statement there was a processing disruption with the Bank of England, but declined to give any details about why the link between Crest and the Bank of England had failed.

Euroclear said the link had been restored, the deadline for settlements had been extended by an hour, and no banks had complained.

Some reports have suggested Barclays borrowed more than £1bn from the fund, but the Bank of England confirmed only that £1.55bn had been issued, without giving details of the bank or banks involved.

It was the second time in a month that Barclays had used the emergency fund, but the bank has denied that it is facing a cash crisis.

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