There has been a lot of talk about putting a bank's toxic assets into one entity, a bad bank, and leaving a good bank with viable assets. If you have the bad bank owning the good bank, you have a situation where one of the entities. the good bank, has a solid base of capital.
Barclay's has adopted a variant of the good bank, bad bank approach; they use a variant of the structured investment vehicle (SIV) approach where they are on the hook if a loan sours but their books - at least those they show to the public - do not show the liability.
What they've done is sell $12.3 billion of toxic assets to a "new" non-bank, Protium Finance. But it so happens that Protium is being financed with a $12.6 billion loan by Barclay's and largely staffed by "former' Barclay managers. Interestingly, repayment of the loan with a relatively low rate of interest is all Barclay's will get as, if things go well, the returns on Protium's dealings will be disbursed as follows: (1) fund management fees; (2) a guaranteed 7% return to investors; (3) repayment of the Barclays loan; and (4) residual cash flows to the investors. If things do not go well, Barclay and its shareholders get stuck with the loan.
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