Barclays taps ECB for $11b of cheap funding

LONDON: Britain’s Barclays tapped Europe’s central bank for 8.2 billion euros ($11 billion) of cheap funding this week, marking a U-turn for the bank as it had been worried about the risk of political interference from taking funds. This means Britain’s top banks are likely to have taken over 35 billion euros for their euro zone operations from the European Central Bank’s two offers of cheap cash. Barclays did not take any funds at the previous offer in December, and had indicated it had no plans to take any at all.  It said on Friday the money would be used to manage funding gaps in Spain and Portugal, with 6.2 billion of the funds earmarked for Spain. That is seen as a more efficient way to fund local operations than by providing sterling-denominated funds from headquarters, especially if there are further problems in the euro zone or even a remote threat of a break-up of the bloc. The bank said any funding benefit would be ring-fenced and “not contribute to the remuneration of any personnel”. Some 800 banks took 530 billion euros of money from the ECB on Wednesday, with the offer aimed at ensuring no banks collapse from a lack of liquidity and restoring investor confidence. But some banks have turned down the cash and say stronger lenders should show they are able to stand on their own. Barclays CEO Bob Diamond said earlier this month the offer of cheap cash had been “very positive” in restoring market confidence. From gulftoday