Will Barclays Bank Take a Long Time to Recover?

Having just counted the huge cost of making good their past misdemeanours it has been announced that Barclays Bank have had to pay out over £4.8billion in fines and compensation for past wrong doings in the financial sector, and this figure is one that no Binary Options trader should ignore.

In years gone by the banking sector has always been robust and one that has been a reliable environment for traders wishing to cash in on the upward curve in profits that all major banks have been making, but as recent events has proven those days have long gone with many banks finding it much more difficult to make a profit at all.

The cash set aside by banks such as Barclays does appear to be growing for the early estimates in regards to how much they had to compensate their customers for over the Payment Protection Insurance mis-selling were far too low in fact Barclays have had to set aside another £900million to repay their customers the premiums they paid along with interest.

If you are a Binary Options trader then it may prove a good decision to take a negative outlook when placing trades on Barclays or in fact any of the other major banks that are having to find large amounts of cash to repay customers.

In fact it is expected that another set of compensation payments may have to be made to businesses that took out loans with Barclays and were forced to take out some complicated Interest Rate Swaps, along with a range of fines to be imposed for alleged and proven rigging of Currency Exchange Rates and possibly a batch of other yet undisclosed wrong doings.

In fact with the UK Government owning a fair amount of the stock in banks they help to bail out, and with the Government looking to offload those shares as soon as they can this will see the share value of many banks possibly dipping quite dramatically as the markets become swamped with shares.

So if you are thinking of placing any type of Binary Options on the value of banking institutions it will probably be advisable to take the view that in the short term at least the value of banks is going to dip or remain static for quite a while, until they have finally paid out compensation and fines for the many different scandals that they have been involved in over the years.