City: Bank chaos

FOR how much longer can Andrew Buxton, chairman and chief executive of Barclays, hang on? At present he's there by his fingertips alone, still apparently supported by his board (just about) but with institutional shareholders increasingly vocal in their demands for blood.

Last week Barclays announced the first loss in its 300-year history, after massive provisions for bad lending. It also took the panic step of halving its final dividend. And it's not just the bank's finances that look shocking. Many complain of a management which from its highest to lowest level is in a demoralised state of chaos. Is Mr Buxton's laid-back, squirearchical style the one to set things right? The institutions think not. Mr Buxton was managing director of Barclays at the time most of these disastrous lending decisions were taken. Though he was apparently not involved in the individual credit decisions, he has got to be seen as partly responsible. It defies belief that his reward for cocking up on such a massive scale, and squandering the pounds 926m raised in a rights issue five years ago, was to be made chairman and chief executive.

It is now clear beyond a shadow of a doubt that the board made a serious error in appointing him to the position; it has only perpetuated the uncertainty and sense of crisis at Barclays. When directors threw Sir John Quinton to the wolves early last year, they hoped it would be sufficient to stop growing City unease. Rather than take the opportunity of bringing in an outside chairman or chief executive, non-executives meekly caved in to Mr Buxton's demand that he be given both titles. Now they've got a double problem to solve: how to force him out and how to replace him.