Fudge or fix?

Barclays announced in September it had sold $12.3 billion of credit assets to a newly established fund called Protium Finance. The acquisition was largely financed by a loan from Barclays, meaning the bank has insulated itself against further mark-to-market volatility but risks losses if Protium is unable to repay the loan. Does this present a model for other banks? Christopher Whittall investigates

Governments across the globe have collectively spent trillions of dollars to help prop up ailing banks via capital injections, pump liquidity into the financial system and breathe life back into economies through a hotchpotch of stimulus packages. But so far, initiatives to rid bank balance sheets of the toxic assets that helped trigger the crisis have been limited.

Although many have made use of the US Term Asset-Backed Securities Loan Facility or looked to reduce the size of balance sheets by