Barclays in talks with Treasury about Asset Protection Scheme

Barclays is in talks with the Treasury about joining the Asset Protection Scheme, the programme rolled out to restore confidence in the UK’s biggest banks by providing protection against future losses on their riskiest assets.

Under the terms of the scheme, banks receive protection for a proportion of their balance sheets so that the healthier core of their commercial business can continue to lend to creditworthy businesses and households.

In a statement to the city, Barclays said it was 'in dialogue with HM Treasury and the FSA regarding its potential participation in the government's Asset Protection Scheme.'

'Barclays decision whether – and to what extent – to participate in the scheme will be based on the economic merits to shareholders of any such participation.'

In return for the protection, banks must pay a fee and enter into legally binding agreements to increase the amount of lending they provide to homeowners and businesses.

Last month RBS hammered out an agreement in principle with the Treasury which said it would pay £6.5bn to have £325bn of assets of its assets protected.

Further reading:

HM Treasury notice on the Asset Protection Scheme

Lloyds Group win huge government tax concession

RBS poaches Abbey National, A & L CFO