Barclays is working with its auditor PricewaterhouseCoopers (PwC) to draw a line under mounting speculation over the bank’s exposure to the global credit crunch.

PwC has been asked to help with a breakdown of Barclays’ financial performance for a keenly awaited trading statement due on November 27.

Shares in Barclays were briefly suspended on Friday amid rumours that it was poised to make a writedown of nearly £5 billion after changes in the upper ranks in Barclays Capital, its investment banking arm.

Speculation swept the market that John Varley, group chief executive, and Bob Diamond, the head of Barclays Capital, had resigned. Barclays denied the rumours and Mr Varley had to reassure staff over the health of the business in an internal memo.

Barclays typically uses only words in its trading updates, but hopes that the extra information provided in two weeks’ time will reassure those still worried about knock-on effects of the sub-prime chaos.

The banks Citigroup, Morgan Stanley and Merrill Lynch have between them announced losses of more than £10 billion on sub-prime mortgages and financial instruments, putting pressure on other banks to come clean.

It is not thought that Barclays will bring its trading statement forward, as has been rumoured.

Barclays refused to comment on its work with PwC yesterday, but an insider said that it was “aware of what the markets are interested in . . . We have always been at the transparent end of the spectrum.”

Barclays has been one of the biggest casualties of increased speculation about stock market fallout from the credit crunch. Its market value has tumbled by £21 billion since the start of February, when HSBC first gave warning about its own exposure to the downturn. Despite efforts by senior Barclays figures to reassure shareholders, its shares have fallen by 42 per cent since that date.

Mr Varley, in his memo to staff, said that Barclays had a “strong capital base” and was “awash with liquidity”. He said: “If there were any substance in the rumours that I have been hearing in recent days, we would not have been required to have made a stock market announcement. But we have not.”

— The bonus season risks being a damp squib in America after it emerged that UBS had put a cap of $750,000 (£358,000) on the traditionally goldplated payouts. A far bigger slice of bonuses will be in shares than in past years. The move comes a month after the sub-prime crisis led UBS to make a $3.5 billion writedown. HSBC writedown expected, page 41

Times Recommends

• C&G axed - 1,660 jobs to be lost
• UK house prices rise 1.1% as buyers return
• Mixed reaction to US banks repaying bailouts