British bank Barclays PLC has sold $12.3 billion of its most toxic assets to Protium Finance, which is registered in the Cayman Islands and will be run by two former executives from Barclays, viz. Stephen King and Michael Keeley.

Protium Finance is supported by US$450 million of new funding and a $12.6 billion loan from Barclays.

Some 45 investment bankers of Barclays have relinquished their positions to form an asset manager called C12 Capital Management that has contract with Protium. Barclays will pay a $40m annual management fee to Protium Finance.

Products will remain on the Barclays' balance sheet for regulatory purposes.

Lender's recent move has swapped the risk of short term instability in their price because of market to market accounting in exchange for the risks on the 10-year loan. But, a number of analysts have criticised lender's recent move.

It should be noted here that Barclays has not opted for taxpayers' money to fight recent economic downturn but accepted funds from Middle Eastern investors.

Chris Lucas, Barclays's finance director, said, "For Barclays, this represents a good opportunity to create greater predictability of income and economic capital utilization."

Shares in Barclays soared to 380p, gaining 3 per cent.