ABN Amro appeared to slip farther away from Barclays yesterday as its offer for the Dutch bank dwindled to €11.9 billion less than the rival bid from the Royal Bank of Scotland-led consortium. The sliding Barclays share price, down another 22p to 589p yesterday, has reduced the value of its mostly paper-based offer to only €58.4 billion (£40 billion).

By contrast, the RBS offer, which is 93.5 per cent cash, has been affected only modestly by the stock market gyrations and was worth €70.3 billion by yesterday’s close, 20 per cent more than ABN’s.

Barclays tried to put a floor under its sagging shares, denying reports that it could lose hundreds of millions of dollars through exposure to special-purpose debt vehicles invested in securities backed by US sub-prime mortgages. One person familiar with the matter said that the maximum Barclays exposure, even if all backstop lines of credit to these vehicles, known as SIV-lites, were drawn, would be $700 million (£350 million).

“Taking all the SIV-lite exposure, it would be a real stretch to imagine that the losses could be a hundred million pounds,” the source said. “This is not a black hole for Barclays by any means.”

Barclays’ share price has slumped by 20 per cent since July 24, when the credit crunch started to bite, its descent steepening amid concern about Barclays’ role at the German bank Sachsen LB, which was rescued over the weekend.

Barclays helped to create one of the SIV-lites, Sachsen Funding I, which got the German bank into difficulties, but Barclays insiders argued that Sachsen managed the fund and was responsible for picking its investments.

Ed Cahill, the Barclays executive responsible for creating SIV-lites, left the bank last week. The share slide comes despite a significant share-buying operation by the bank, which in recent weeks has been acquiring about £25 million of its shares every day as part of a £2.4 billion buyback plan.

Yet Barclays has not given up hope, with some insiders regarding the implosion in the credit markets as making the RBS deal harder to sell to the Dutch authorities because of its relative balance-sheet weakness and because it might yet struggle to raise the finance. RBS has launched a break-up bid for ABN with its partners, Banco Santander, of Spain, and Fortis, the Belgian-Dutch bank.

Barclays Capital is in talks with Cairn Capital over the restructuing of its SIV-lite, Cairn High Grade Funding I, after an original restructuring attempt failed. Cairn hopes that BarCap will be able to lengthen the maturity terms of its commercial paper. The investment bank has also entered restructuring talks with another SIV-lite, Mainsail II. Golden Key, a third SIV-lite set up with the help of BarCap, is believed to have asked for talks with the bank, but has not yet conferred.

Two high-profile executives parted company with Citigroup. James Higgins and David Pichler, co-heads of developed markets credit trading, left after their division was merged into the emerging markets credit trading desk headed by Carey Lathrop.

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