Barclays shuns toxic asset scheme

Barclays has remained profitable despite the financial crisis

Barclays says it has decided not to participate in the government's insurance scheme for toxic assets.

The bank said it would not be in the interest of investors, depositors and clients to participate in the scheme.

The Asset Protection Scheme uses government money to insure banks' riskiest assets against further losses.

Unlike Lloyds and RBS, which have been part-nationalised, Barclays has stayed profitable amid the collapse of the financial markets.

The announcement comes after Barclays' finances were subject a "stress test" by regulators to see how resilient the bank was to credit risk, market risk and economic conditions.

ASSET PROTECTION SCHEME Taxpayers underwrite banks' bad debts Essentially an insurance scheme Banks pay a fee to take part Banks are liable for initial losses, similar to paying the excess on an insurance claim

It had earlier said it was considering participating in the scheme.

Barclays has been reluctant to accept government help during the financial crisis.

It has, instead, raised funds from Middle Eastern investors and is planning to sell its iShares fund management business to secure additional funds.

"The trading performance of the Barclays Group in 2009 continues to be strong," Barclays said.

Lloyds Banking Group and RBS will in total insure almost £600bn worth of toxic debts as part of the scheme.