Diamond restores faith in Barclays

3 September 2007

Shares in Barclays are on the increase again after chief executive Bob Diamond restored faith in banks' financial health.

After being criticised for his silence, Mr Diamond spoke out over the weekend.

Speaking to the Sunday Telegraph, he said: "The world's credit market bubble has burst so we have very difficult trading conditions."

Bad headlines have dominated Barclays in recent weeks, Ed Cahill, a junior banker involved in setting up SIV-lites departed suddenly, and fears of a liquidity crisis have loomed.

"Barclays Capital is very good at managing its risks. We are weathering the storm. I've already said that our July results were better this year than last year. We'll manage our way through August as well."

The news that Barclays borrowed almost $3.2 billion from the Bank of England's emergency lending fund have led to fears that a liquidity crisis was on the horizon.

"It's too bad it was allowed to get that much buzz in the market. We are awash with liquidity. There is no issue with liquidity at Barclays. In fact, we're big beneficiaries in times of a flight to quality," said Mr Diamond.

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