In effect, the gain and capital increase is lower than the cash received (in effect, Barclays is treating part of its loan as profit and capital!). In addition, senior executives of Barclays received substantial gains from the sale under a compensation scheme, where BGI employees received shares and options over (up to) 10.3 % of the division’s equity.

Effects of changes in mark-to-market accounting standards -- which arguably, reflected political and industry pressure -- are also not clear. New guidance permits banks to exclude losses deemed "temporary," and also allows significant subjectivity in valuing positions. This may improve the financial position and overstate both earnings and capital. Some commentators believe that the changes could increase earnings by up to 10-15% and capital by up to 20%.

The market ignored continuing increases in bad debts and provisions. After all, "that’s so yesterday!" Further losses are likely in consumer lending (e.g. mortgages, credit cards and auto loans), corporate and commercial lending.

In recent years, it's become an article of accepted faith that corporate debt levels have fallen. In aggregate, that's perfectly true. However, the debt has become concentrated in a number of sectors - commercial property, merger financing, private equity/ leveraged finance, and infrastructure and resource financing.

The overall quality of debt has deteriorated significantly. In 2008, over 70% of all rated debt was non-investment grade ("junk"). This is an increase from less than 30% in 1980 and around 50% in 1990. The debt is also heavily reliant on collateral; the loans are secured against financial assets (shares and property). Reduced ability to service the debt and falling collateral values may prove problematic. For example: The recent distressed sale of the John Hancock Tower produced around 50% of the value paid a few years earlier.

In April 2009, the International Monetary Fund (IMF) estimated that banks and other financial institutions face aggregate losses of $4.1 trillion - an increase from $2.2 trillion in January 2009 and $1.4 trillion in October 2009. Around $2.7 trillion of the losses are expected to be borne by banks. The IMF estimated that in the United States, banks had reported $510 billion in write-downs to date and face additional write downs of $550 billion. Eurozone banks had reported $154 billion in write-downs and face a further $750 billion in losses. British banks had written down $110 billion and face an additional $200 billion in write-offs.

Banks may not be properly provisioned for these further write-downs. Recent accounting standards made it difficult for banks to dynamically provision, whereby banks provided in low-loss years for any eventual increase in loan losses when the economic cycle turns. Criticisms regarding income smoothing led to this practice being discontinued. Increasing bad debt will flow directly into bank earnings; credit losses increase as the real economy slows.

Banks may also face write-downs in intangible assets (goodwill or surplus on acquisition) and future income-tax benefits. The values of businesses purchased in a more favorable environment will need to be progressively reassessed. The tax benefits of losses can only be carried as an asset where there's a reasonable prospect of utilization in the near future.