Banks have emerged as possibly the greatest casualties from the current round of equity market turmoil and Barclays - its share price has tumbled to 164p - is no different.
True, much of that share price pain has little to do with Barclays. Fears of a return to recession, as the US economic recovery stumbles and stalls, is one big sentiment factor weighing on all bank shares. After all, if the US economy stumbles, the rest of the developed world is likely to follow; and that would be bad news for both credit demand and credit quality. The other big sentiment factor is the eurozone's debt problem. That could even fuel a liquidity crisis as fears grow over just how exposed lenders are to the sovereign debt of Europe's weaker economies, making banks cautious about lending to each other.
But Barclays also faces its own concerns. After having sold its asset management arm, it's now heavily dependent on low-growth retail banking and volatile investment banking. The investment banking focus leaves Barclays badly exposed to the uncertainties associated with moves to ring-fence investment banking from retail banking - the government appointed Independent Commission on Banking is likely to recommend such an approach in its final report next month. Barclays' cost base looks heavy for the sector, too.
