The Mail on Sunday reports that Edward Cahill, the Barclays Capital banker who last week quit his job as head of the firm's collateralised debt obligations unit, has apparently 'disappeared'.

Although Cahill has been known to take off for days at a time in the past, and BarCap's compliance unit is believed only recently to have checked out his team and given it the all clear, the Mail quotes Cahill's brother, Michael, who said 'I hope he is not the next Nick Leeson'.

Barclays Capital has refused to comment on the reason for Cahill's departure, but the fact that he was involved in leading a team involved in complex debt structured investment vehicles linked to assets like subprime lending (known as SIV-lites) has got the conspiracy theorists working overtime. As the Financial Times points out, 'two SIVs-lites created by Barclays Capital have collapsed'. And Bob Diamond, the President of Barclays and the man who runs BarCap, confirmed to the newspaper that vehicles of this kind were facing difficulties in the current market climate. Barclays exposure to the failed debt vehicles created by BarCap is thought, however, to be only in the low hundreds of millions of dollars (in other words, painful but manageable). As Reuters points out, SIV-lites 'can be more than four times more leveraged than traditional SIVs and invest in portfolios that have less sector diversity', and therefore more risk.

The Sunday Times is also fingering Barclays as the bank that was behind the problems of German Landesbank SachsenLB, which had to be rescued and sold a couple of days back (Sachsen is said to have sustained losses of some $900m from its capital markets activities). According to the newspaper, 'Barclays appears to have been responsible both for designing a complex fund that got Sachsen into difficulty (in the first place) and for helping to pull the plug on the bank by demanding margin calls in respect of another Sachsen investment'.

A spokesperson at Barclays said that the idea that Cahill, apparently dubbed 'Captain Sensible' as he was considered to be such a safe pair of hands, was another Nick Leeson 'was just stuff and nonsense'. 

The latest rumours surrounding BarCap follow on from a Wall Street Journal report last month which claimed that the firm might also be looking at losses of up to $400m through exposure as an investor to one of those two Bear Stearns hedge funds which went belly up a few weeks back.

Nick Leeson, of course, was the rogue trader who was responsible for the collapse of Barings in 1995. The bank went belly up after Leeson sustained trading losses of around $1.7bn. The losses remained undiscovered for some time. Dutch bank ING subsequently paid £1 to take on Barings and its liabilities.

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