Jeremy Warner: The Barclays money-go-round
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.Outlook: From the sublime to the ridiculous. Barclays has helped to shore up wafer-thin capital ratios by selling its successful iShares asset management business to CVC Capital Partners for $4.4bn. This all sounds fine and dandy until it is pointed out that Barclays is lending CVC 70 per cent of the money it needs to make the purchase.
Such are the delights of leverage. To you and me, it might look like a money-go-round, but to Barclays the effect is a magical boost to capital ratios. The proceeds go straight into capital reserves, but the amount lent is a mere drop in the ocean compared with the total size of the Barclays balance sheet.
As if all this wasn't rum enough, the transaction includes a $6.9m cash payout to Bob Diamond, the Barclays Capital head. As it turns out, he owns share options in the subsidiary which is selling iShares. Don't you just love investment bankers. Even with the banking sector on its knees, money just seems to stick to them.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments