BARCLAYS has come out punching this weekend in an attempt to silence the critics who thought it the most likely of the big British banks to suffer from the American sub-prime mortgage crisis.

It needed to. The bank has looked extraordinarily accident-prone in the past fortnight. First there was the departure of Edward Cahill, a young Irish banker who quit after his area of business – specialist highly leveraged funds – crashed and burnt as the credit market dried up. Some people on the board had never heard of him a fortnight ago, but once he had been labelled a potential Nick Leeson – a gross and misconceived exaggeration – they quickly found out just who he was.

Then there was the bizarre case of the £1.6 billion of emergency borrowing from the Bank of England, the result of a malfunction in one of the City’s back-office clearing systems. It was an interesting event, but it was allowed to become a much bigger story by a failure to reveal exactly what had gone on. Barclays didn’t make a statement with the full story until a day later.

In another year, all this would have been quickly forgotten. But this is not another year. We are in the middle of a credit crisis that some commentators believe could even lead to a full-blown recession. Once the stories about Barclays started circulating, they were like a forest fire. There was even speculation last week that the bank might be forced into a profit warning – not true, but the rumours were highly damaging.

As the chart shows, Barclays’ share price has suffered accordingly. This is where the real rub lies. Barclays’ offer for ABN Amro is two-thirds comprised of its own shares. The rival offer, from a consortium led by Royal Bank of Scotland, is almost all cash. As at Friday night, Barclays’ shrunken share price meant its offer was worth €60 billion (£40 billion), and RBS’s €71 billion.

It’s a huge gulf, and Barclays needs to act quickly to improve its share price if it is to stay in the race. There are, of course, some big problems for the RBS team, as my colleague Grant Ringshaw reports on the facing page, but it is Barclays this weekend that has the most to do.

BAA departures

A BUSINESS’s greatest asset is its people – that’s what most chief executives say, and while overuse has robbed the phrase of its power, it remains true.

So when a business starts losing top talent, it’s time to start worrying. This applies to BAA, the much-maligned operator of seven UK airports, including Heathrow, Gatwick and Stansted.

There has been a steady exodus since it was taken over by a Spanish-led consortium last year. First there was the spurt of high-level departures you would normally expect after a takeover – Mike Clasper, the chief executive, went, as did Marcus Agius, the chairman.

But since then Tony Douglas, the boss of Heathrow, has gone, as has Peter Blausten, director of human resources. Then came Duncan Bonfield, head of corporate affairs, and the chief press officer, Mark Mann. Last week Donal Dowds, director of safety, security and services, left.

And today we reveal that Paul Griffiths, who used to run Gatwick and who had been given the task of forging a new relationship with airlines, has quit, too.

Transport executives know Griffiths as one of the bright sparks of the industry, who as one of Sir Richard Branson’s right-hand men helped entrench the success of Virgin Atlantic and revamp Virgin Rail. At BAA, he stood out because airline executives liked him. One I spoke to last week credited him with having the courage to make the costly changes that ensured the survival of his airline’s operations at Gatwick.

Letting Griffiths slip away – to Dubai, where he will be chief executive of the Gulf state’s thrusting new airports company – is not a promising sign.

On the credit side for BAA, it has managed to find some serious nonexecutives to bolster its board. Sir Nigel Rudd (the former Boots boss who is, incidentally, deputy chairman at Barclays) is the new chairman, while Lord Stevens, the former Metropolitan police commissioner who now advises the government on security, should help the company deal with ministers over the security clampdown that has contributed in great part to the chaos at our airports.

Rudd has received assurances he will not have to worry about the Spanish owners attempting to micro-manage the company. Rafael del Pino, the executive chairman of Ferrovial, the Spanish firm that is BAA’s controlling shareholder, has stepped down from the airport group’s board.

I suspect that this might end up being seen as a rather canny move on Rudd’s part. While BAA is up against it at the moment, the picture in a year’s time – when Heathrow’s swish new fifth terminal has been open for six months – will be very different.

Stock responses

IN renaissance Italy, city states constantly fought each other for control of trade routes and ports. History is now repeating itself with the battle between Qatar, Dubai and Singapore over Europe’s – and eventually the world’s – stock exchanges.

Each of the trio is geographically small but enormously wealthy, and all are looking beyond their borders to ensure they have a commanding place in the global economy.

The fun will be in watching which one gains the upper hand – and what, if anything, our response will be.

John Waples is away

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