Barclays calls in auditors amid City rumours

by Gill Montia

Story link: Barclays calls in auditors amid City rumours

Mounting fears about the true level of losses in the US sub-prime mortgage crisis have led Barclays to bring in its auditor, PricewaterhouseCoopers, to prepare a trading update, due to be published on 27th November.

The bank does not normally publish figures in its trading updates but on this occasion will provide additional information aimed at reassuring investors and customers alike.

On Friday of last week, shares in Barclays were suspended for a short period because of rumours that it could writedown £5 billion.

At the same time there was talk of senior management changes at Barclays Capital, the bank’s investment banking business.

The rumours have been denied by the bank, which has stated that Bob Diamond, the head of Barclays Capital, remains in post.

Barclays has consistently been at the centre of speculation over losses from the US sub-prime mortgage crisis and its market value has fallen by £21 billion since the beginning of February 2007.

This was the point at which HSBC first warned of its own exposure in the looming crisis.

Pressure has been mounting for Barclays to clarify its position with regard to losses.

Citigroup, Morgan Stanley and Merrill Lynch have already reported losses of over £10 billion between them, and Barclays’ reticence in the matter is now fuelling speculation that its losses are large.