Barclays still finds Lehman attractive, may buy some assets

— -- Responding to widespread speculation about talks between the two firms, Barclays said "it is discussing with Lehman Brothers the possible acquisition of certain Lehman Brothers assets on terms that would be attractive to Barclays shareholders."

However, the British bank also cautioned that "there can be no assurance that the discussions will result in an agreement."

The announcement came after weekend negotiations for an outright purchase of Lehman by Barclays failed because the U.S. government would not guarantee the deal.

Lehman is trying to sell its still-valuable asset management and brokerage divisions in a bid to raise cash and save company jobs after its $639 billion Chapter 11 bankruptcy filing in New York. On Monday, the firm said it is in advanced discussions with several potential buyers.

Private-equity firms are among some of the likely buyers, said Fred Cannon, a research analyst for Keefe Bruyette & Woods.

Lehman shares were trading at 22 cents early Tuesday afternoon.

Meanwhile, regulators, other financial firms, investors and Lehman's more than 25,000 employees scrambled to limit the financial fallout from the bankruptcy and assess the demise of the 158-year-old financial giant.

Financial and credit market instability linked to the national real estate market drop "created significant liquidity problems," Lehman CFO Ian Lowitt said in a bankruptcy affidavit.

Regulators assured Lehman brokerage customers that their accounts were protected and would be transferred to other firms. As of March, Lehman's investment management division had roughly $277 billion in assets under management, according to a Securities and Exchange Commission filing.

The SEC said its staffers would remain on-site at Lehman to oversee an orderly transfer of accounts to brokerages insured by the federal Securities Investor Protection Corp.