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At first glance the move by Barclays chief executive John Varley and president Bob Diamond to find £7bn of fresh funds without the help of the UK taxpayer looks smart.
While Eric Daniels, the boss of the combined Lloyds TSB-HBOS could end up with UK plc owning 40% of the bank and Stephen Hester, the soon-to-head of RBS be running a bank where the state has a 60% shareholding, Varley and his team are avoiding the embarrassment of Gordon Brown's intervention.
Because they are not taking the taxpayers' money, the ban on bonuses will not apply. Neither will the ban on dividends. The demands to increase lending to small businesses and would-be homeowners will not apply.
But, at what price? Instead of the UK taxpayer taking a 30% stake, Varley and his right-hand man Diamond are inviting shareholders in the Middle East to own almost a third of the bank.
The Middle Eastern investors appear to be extracting a higher price than the UK government - although Barclays will no doubt argue that at least its new dominant investors actually want to be on its shareholder register. The UK taxpayer is taking its stakes in RBS and Lloyds TSB to prevent banks going bust. The Middle Eastern crew must think they can actually make money from owning such a huge stake in Barclays.
Barclays' existing shareholders get to vote on the matter on November 24. They should think carefully about whether it is better to be investing in a bank alongside the UK taxpayer or Middle Eastern governments.
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