£800m hedge fund bail-out adds to City's jitters over Barclays

£800m hedge fund bail-out adds to City's jitters over Barclays

http://business.guardian.co.uk/story/0,,2160297,00.html

Richard Wray and Ashley Seager
Saturday September 1, 2007
The Guardian


Barclays Capital, the financial group's investment banking arm, yesterday bailed out a $1.6bn (£800m) hedge fund as the global credit squeeze and US sub-prime mortgage crisis claimed another victim.
The news increased jitters about Barclays in the City, as it followed Thursday's revelation that it borrowed £1.6bn from the Bank of England after a breakdown in the electronic system that processes trades.

Barclays, however, stressed it was not facing financial difficulties. It said its decision to borrow from the Bank of England - at a penalty rate of interest - was due to a technical hitch, and the bail-out of the Cairn Capital fund was unrelated.