According to the Bank of England (BoE) banks are expected to significantly increase the cost of borrowing for home-buyers and businesses over the next three months as they pass on increases in funding. Despite passing on these costs, banks are not expecting much change in the loan market and are predicting it will remain stable.
The FTSE 100 rallied today, jumping to its highest levels of the week today despite the bank market manipulation news due to the announcement of an unexpected set of measures aimed at tackling the Euro Zone crisis.
Taxpayer-backed Royal Bank of Scotland (RBS) looks set to be fined as much as £150 million for its participation in the market manipulation offences that have recently come to light. RBS are continuing to co-operate with investigators but any resolution could be months away a person close to the matter was reported as saying.
Bob Diamond, Barclays Chief Executive Officer is not resigning over the rate-setting misconduct scandal that resulted in a £290 million fine for the bank. In an open letter to the Treasure Select Committee, Mr. Diamond has welcomed plans to discuss Barclays’ conduct and states that there is no evidence of knowledge of the market manipulation by saying the problem was caused by “a small number of people relative to the size of Barclays trading operations”
Spain’s Economic Minister Luis de Guindos has formally requested financial aid today to bail out its banks. In a letter to Euro Group Chairman, Jean-Claude Juncker, Spain’s Minister requested up to €100 billion stating that the final amount would be finalised in the future, claiming that this should be enough to cover the needs of the financial institutions as well as a security ‘buffer’.