More Eurodollar Anecdotes on Shriveling

by Jeffrey P. Snider
Alhambra Partners

Barclays has received all the media attention in the past few days after announcing its exit from Africa. Specifically, the bank intends to divest enough of its 62% stake in the Africa unit so as to skirt tougher UK regulations intended to “ringfence” domestic operations; to keep the global bank from potential global financial horrors recurring and devastating once more the British end. It was that eurodollar activity that put the bank into nationalization from which it has not yet, seven years on, escaped. In this one, specific instance, regulations are playing a large role (requiring all of Barclays Africa liabilities to be placed in ratio calculations with only the pro forma part of the assets) in the bank’s shrinking, but elsewhere we see the same contraction tendencies.

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