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NEW YORK, June 17 (Reuters) - Barclays Plc will nolonger make markets for mortgage-backed bonds issued prior tothe financial crisis as they have become less profitable undertighter British regulations on these securities, a bankspokesman said on Wednesday.
Barclays will reallocate resources to other areas of itsU.S. mortgage business with no traders expected to lose theirjobs, according to Bloomberg, which first reported the move by Britain's second biggest bank in a part of the U.S.mortgage-backed securities market worth $700 billion.
Barclays spokesman Mark Lane confirmed the bank's decision,following Royal Bank of Scotland Group Plc which said inNovember it will pull out of the U.S. mortgage market.
U.K. regulations now require banks to hold even more capitalagainst junk-rated bonds. Some older U.S. MBS not backed by thegovernment have seen their ratings slashed down to speculativestatus after mortgage defaults soared when the housing bubbleburst.
(Reporting by Richard Leong; Editing by Tom Brown)