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Bank of England is reportedly probing Barclays over claims its traders played down the bank's risk on private credit loans

Bank of England is reportedly probing Barclays over claims its traders played down the bank's risk on private credit loans

The probe originates from a complaint lodged earlier this year by a whistleblower who alleged that Barclays placed total return swaps in its trading book rather than its banking book. That distinction can lower capital requirements and inflate reported profits. The Bank of England's Prudential Regulation Authority bars such illiquid loans from the trading book unless backed by robust supporting evidence. Barclays shares dropped 3.5 per cent to 417.5p.

Last year the regulator cautioned banks against 'imprudent' gaming of capital rules.

Barclays traders reportedly argued the exposure qualified as a traded position.

The bank's only comment: 'Barclays takes seriously its regulatory obligations.'

MoreDaily MailBarclays 'probed by BoE' over exposure to risky private credit loansThe GuardianBank of England said to be reviewing Barclays’ handling of private credit loansReutersBoE looks into claim Barclays private credit exposure misrepresented, FT reports - ReutersThis Is MoneyBarclays 'probed by BoE' over claims traders understated exposure to risky private credit loans
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