Business View: I've got a banker right here, his name is Paul Revere

Matt Barrett is an Irishman who made his career in Canada. But for the British he is a sort of Paul Revere in reverse. Like the hero of the American Revolution, he is warning of impending danger, but in this case the chairman of Barclays is shouting out to European banks: "The Americans are coming, the Americans are coming!"

Matt Barrett is an Irishman who made his career in Canada. But for the British he is a sort of Paul Revere in reverse. Like the hero of the American Revolution, he is warning of impending danger, but in this case the chairman of Barclays is shouting out to European banks: "The Americans are coming, the Americans are coming!"

He's not alone. Josef Ackermann, the Swiss-born head of Germany's Deutsche Bank, used the threat of the Americans to justify cutting 6,400 jobs a couple of weeks ago. And Michel Tilmant, head of Holland's ING, said recently that the biggest challenge faced by European banks is keeping up with their huge US rivals.

However, the deals that created these US giants - such as Bank of America buying FleetBoston and JP Morgan gobbling up BankOne - happened last year or even earlier. If Paul Revere had been as tardy in warning of an impending threat, the US would still be our colony.

So why these warnings? The Americans have not shown any signs of being more interested in Europe. Bank of America is rumoured to have looked closely at Barclays last year but demurred; Citigroup considered gate crashing Santander's takeover of Abbey, but soon thought better of it. Indeed, Citi's sale of its Travellers insurance business shows it is rather more interested in domestic issues.

No. These messages are for European consumption. These are big Euro banks saying we either hang together or hang separately. And, as many banks and investors agree, the message is for the politicians.

In the UK, we live in a fairly laissez-faire regime. Down at Lloyds TSB they will moan that they weren't allowed to buy Abbey but a Spanish bank was (to which the answer is: "Didn't the regulator do you a favour?"). It is not something that would have happened in France, and certainly not in Italy, where the Governor of the Bank of Italy, Antonio Fazio, has stopped ABN Amro of Holland and Banco Bilbao Vizcaya Argentaria of Spain from increasing the stakes they own in local banks.

But Mr Fazio has incurred the wrath of the European Single Market Commissioner, Charlie McCreevy, and if Brussels intervenes to open up the Italian market, this could prompt a land grab in Europe as banks dust off their plans to buy rivals.

So where do UK banks stand if there is a deal scramble? HSBC and Royal Bank of Scotland are too large to be anything other than bidders, and Barclays is betwixt and between. Only BNP Paribas could swing a purchase of Barclays but, for reasons I explain below, it probably would not find it attractive.

Lloyds TSB and HBOS look like potential targets, but both have large insurance businesses that are not exactly flavour of the month.

Barclays is the only bank to have come out in favour of a European move. RBS has been pretty cynical, though it could just be playing it coy; rumours abound that it is eyeing ABN, attracted by the bank's US assets as much as its Dutch ones. But the coyest of the lot, HSBC, looks a more likely buyer for ABN, which would give it a much-needed boost in the US, help for its underscale investment bank, extra Far East assets, and a bridgehead into northern Europe.

At the moment, all this looks like idle speculation. The biggest cross-border purchase in Europe so far has been the £8.2bn deal for Abbey. The banks, though, are laden with intent. It only takes one move to start a frantic polka.

Can Barclays keep it up?

While Mr Barrett was being Paul Revere, his new chief executive, John Varley, was Captain Contradiction. It is not easy being the boss of a bank and announcing profits up 20 per cent. You have to tell the City that you are doing really well, but avoid accusations of exploiting the poor consumer.

For Mr Varley, though, there is an answer. He says Barclays made all its money at its investment bank, Barclays Capital. As it delivered a cool billion, up a quarter on 2003, this was a justifiable response.

But it begs a question about the sustainability of Barclays' profits. This is a bank that made £1.49bn out of dealing in foreign exchange, bonds and the like. However good its highly paid dealers are at Barclays Capital, these profits are not as reliable as making a nice margin out of lending to the good old British consumer.

j.nisse@independent.co.uk