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Barclays monoline insurance ploy pays off

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Margaret Doyle-- Margaret Doyle is a Reuters columnist. The opinions expressed are her own --

By Margaret Doyle

Barclays has avoided the dead hand of state shareholding and, on Thursday's evidence, it looks as though it will escape completely.

Barclays Capital has enjoyed a storming first quarter -- so good it is hard to see it being sustained -- which has allowed the bank to make more big write-downs and still report a 15 percent increase in pre-tax profit.

The key question is whether its provisions against so-called level 3 (hard to value) assets are sufficient.

On the face of it, they do not appear to be, because they have provided for a write-down of 24 percent on an alphabet soup of American junk assets. That compares to a write-down of 75 percent taken on a bunch of similar assets by Societe Generale, which unveiled an unexpected first-quarter loss.

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