Barclays shares hit 30-month low

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Shares in Barclays Bank have fallen to two-and-a-half-year lows amid continuing speculation about funding problems linked to the credit crunch.

The shares fell by 8% to 524.5p at one point but later recovered, closing down 5.9%, or 34 pence, at 537.5p.

Rumours about Barclays first emerged in August when technical problems twice forced the bank to borrow overnight funds from the Bank of England.

Barclays declined to comment but has always denied having funding problems.

In a move designed to allay market fears the bank's head of global retail and commercial banking, Frits Seegers, bought Barclays shares worth almost £700,000 ($1.5m) on Friday.

"There are concerns about writedowns and everything else, but the comments Barclays have made to date suggest that is not an issue, as does the fact they are still buying back their own shares," said Ian Poulter at Landsbanki Financials.