Friday, September 18, 2009

Bankers hide their dirty underwear

Watch Barclays in the cellar

A more thorough discussion of the Protium business from Gillian Tett.

Posted by letthemfall @ 11:00 AM (763 views)
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4 thoughts on “Bankers hide their dirty underwear

  • This seems to the main point.

    “After all, the fine print of the Barclays announcement makes it clear that while the British bank is going to count the Protium assets as being “on balance sheet” for regulatory purposes, it is removing the assets from the balance sheet in accounting terms, since Protium is legally “independent”, based in the Cayman Islands.

    That means the bank will not need to report the mark-to-market value of those assets, or reveal the source of equity finance for Protium that supplements the Barclays loan. Nor will it need to control the pay of the people running Protium, since they do not count as Barclays staff.”

    Also Barclays will be paid the money they are lending to Protium by way of the “price” and they are then going to use that money to fund speculation.

    The critical point is however that this non arms length deal, is artficially being treated as if it at arms length to release £ to Barclays.

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  • This probably won’t do Barclay’s “informal credit rating” much good, but they’ve calculated that its a price worth paying for the time being.

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  • At least I am not paying for this, which is more than can be said for many other UK banks.

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  • mg – according to the MoneyWeek take on this story (posted 9.56am) you may be paying indirectly.

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