Jeremy Warner: The Barclays money-go-round

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.