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Barclays Under Fire Over Cayman Island Deal

CaribWorldNews, LONDON, England, Fri. Sept. 18, 2009: Barclays bank has come under fire over a $12 billion Cayman Island deal.

The deal will see the bank`s toxic debt being transferred to an offshore company in the British-dependent island.

The fund is being managed by 45 of its former staffers, Guardian UK reports indicate. It will be called the Protium fund and will be headed by Stephen King and Michael Keeley under the C12 Capital Management company. The company is set to receive a $40-m annual management fee from the bank.

A Barclays spokesperson told the Guardina that the move `restricts our exposure to the risk in the assets, thereby mitigating the potential impact of short-term movement in market values and monoline downgrades which we cannot control.`

But some  analysts say the transaction appears driven by accounting, rather than fundamental value since Barclays will be able to avoid taking further big hits by no longer having to price its assets at current market value.