Barclays defends £15 billion private credit book after reported BoE scrutiny
Barclays defends £15 billion private credit book after reported BoE scrutiny Oct 19 (Reuters) - Barclays BARC.L said its £15 billion ($19.97 billion) private credit exposure was treated in line with accounting and regulatory capital requirements after a report the Bank of England was examining if its traders had understated the risk.
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Its treatment of total return swaps is consistent with accounting and regulatory capital requirements, Barclays said in a statement to Reuters on Monday
The Financial Times reported earlier in the day that the BoE was examining whether Barclays traders misrepresented illiquid private credit loans
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
It said its total private credit exposure stood at £15 billion, with the vast majority held in the banking book
It was required to meet certain conditions under capital rules to classify the treatment as trading book, and those conditions had been met and supported by internal governance and external advisers, the bank said
($1 = 0.7512 pounds)
(Reporting by Sri Hari N S in Bengaluru; Editing by Aseem Gujar and Pooja Desai)