Varley told a hearing of the U.K.’s Independent Commission on Banking in London that it’s “important to distinguish” between banks that received equity injections from government and those that used liquidity support. “Of course” Barclays benefited, along with all banks assisted by the stabilization of the financial system. He did not specify which government provided Barclays with assistance.
The U.S. Federal Reserve disclosed yesterday that Barclays ranked among the top users of its $3.3 trillion emergency programs. Barclays, Britain’s third-biggest bank, took the biggest single amount from the Primary Dealer Credit Facility, when it got $47.9 billion on Sept. 18, 2008, the week it acquired the U.S. operations of Lehman Brothers Holdings Inc. Barclays did not receive capital injections from the British or U.S. governments during the financial crisis.
Varley made his comments in front of John Vickers, a former chief economist of the Bank of England, who is chairing the commission investigating whether lenders should split their commercial and investment banking operations to reduce risk in the financial system.
Douglas Flint, the chief financial officer of HSBC Holdings Plc, Europe’s biggest bank, said his bank’s use of government liquidity support was “extraordinarily small” and primarily designed to reduce the stigma for other banks.
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