View from City Road: Barclays is a case for the Governor's eyebrows

When the Barclays board sent five of its ageing knights on a quest for a new chief executive on Wednesday, shareholders and depositors were entitled to suppose that the turmoil at Britain's second-biggest bank was finally subsiding. To find less than 24 hours later that Peter Wood, the finance director, is departing to the much smaller Standard Chartered Bank, reopens all the old questions.

How many other senior executives are so unhappy that they too are ringing up rivals and headhunters? Will Sir Peter Middleton, deputy chairman, Alastair Robinson, head of banking, and David Band, who runs the investment bank, stay once the new chief executive has been found? Sir Peter certainly has reservations.

And has Oliver Stocken, finance director of the investment banking subsidiary, been hauled in at 48 hours' notice simply to avoid the double embarrassment of searching worldwide for a finance director as well as a chief executive?

On Wednesday, when Sir Denys Henderson and his knights set out, Mr Buxton could plausibly stay as chairman and await the choice as chief executive. It is now looking as if the Barclays top management will not settle down as long as Mr Buxton is running the show. As many suspected before, his departure is needed to clear the air.

Yet the appointment of the knights pre-empted the question of whether the board should be seeking a chairman rather than a new chief executive. If the issue is to be reopened, only an outside agency such as the Bank of England can do it.

There is a recent precedent for such a use of the Governor's eyebrows. The clearing banks are not like other businesses, as the Bank recognised when it won permission from Barclays for its finance director, Brian Pearse, to become chief executive of Midland, before forcing the removal of Sir Kit McMahon, then Midland's chairman.

Mr Pearse, an outstanding clearing banker, would now be a good candidate to turn round his old Bank. Although he was finance director during Barclays' property lending fiasco, he was not responsible for credit control. As for the chairmanship, Barclays has two internal candidates. Sir Peter Middleton has a Treasury-honed mind, and Sir Martin Jacomb, another deputy chairman, has wide City experience and chaired BZW before Sir Peter.