Barclays (BSC) Goes To Asia As Sovereigns May Rescue Another Bank

Banking, finance, and taxes

Published: June 15, 2008 4:35 am

A large number of the banks and brokerages in the US and EU have turned to sovereign funds in Asia and the Middle East to replenish their reserves after taking huge losses on mortgage-backed securities and other stupid investments.

Many of the companies which have collected sovereign money have subsequently sold off to 52-week lows on concerns about more bad news, Citigroup (C) being a prime example. Due to these price drops and the resulting loses taken by the country funds, worries have emerged about of whether they will "rescue" banks in the future.

The answer may be "yes" . Barclays (BCS) is roaming Asia, hat in hand, to bring in more capital. According to The Times, "The first opportunity (to invest) is being offered to the China Development Bank and Temasek, a Singaporean government investor." Barclays will probably have to accept awful terms, but at least it won’t be turned away.

Now troubled US banks have a place to beg where they still might find an open wallet or two.

Douglas A. McIntyre

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