Citibank parent Citigroup is understood to be under investigation by the financial regulator of the United States with regard to some potential breaches of securities law.
The issue revolves around the marketing and selling of what are called auction rate securities. These are a type of bond, most commonly used by municipal authorities when looking to generate funds and the question being looked into is whether the actual risks were understated by Citibank.
No comments have been forthcoming from Citibank so far regarding their discussions with the regulators. Instead they have a statement that says they have worked closely with all parties to make everything go smoothly.
In order to try and balance their accounts Barclays are looking to raise in the region of GBP4 billion from external investors. This is to avoid using a rights issue which could seriously affect their share price.
Barclays Bank currently has one of the lowest capital reserves figures in the industry and will certainly face stiff criticism if this is not being seen to be addressed. Criticism tends to equal falling share prices and the bank do not want to see their position further weakened by such activity.
The bank has many facets to its business, with Barclays Insurance, stockbrokers and high street banking just a number of the best known. There is no question that they are operating well but in the current economic climate and with other financial institutions having suffered already it is important that Barclays can source this additional funding.
According to a Lloyds TSB poll of UK consumers inflation is expected to rise yet again, this being the tenth month in succession where the people of the UK have felt that inflation would increase.
The monthly survey carried out by Lloyds TSB has seen the expectation of people for inflation in 12 months time to be at 5 percent, up from the 4.8 percent they had forecast a month earlier. It is interesting that the recent price reductions on fuel at the forecourt did not stop people from anticipating this further increase.
A different view comes from the Bank of England say Lloyds TSB, with their own forecast being that inflation will be lower than 2 percent within two years.