The old principles of lending went out of the window in a mad rush to build up market share. Now the pigeons have come home to roost and the reckoning is being felt, especially in Halifax and Edinburgh.

Further, the Government bullied Lloyds TSB into taking over the bankrupt organisation of HBOS at a price that affects the well-being of its own shareholders. It is accepted in all the financial sectors that Lloyds was a viable business that had acted very prudently in the past few years of the boom.

The bank could have stood on its own two feet without any government injection of capital. It was only due to the insistence by the Government that banks raise the amount of tier one capital to at least eight per cent that caused Lloyds to call for some injection by the Government.

This means that the new bank will have to work hard to gain release from the iniquitous demands of the Chancellor. The governments of European countries, as well as the US, have not demanded 12 per cent from their less than prudent organisations. Yet Lloyds has to pay up in order to bail out the Prime Minister, the Chancellor, and their ilk.

The only way any organisation can return to full profitability is to reign in unnecessary costs. Job losses are inevitable and the only criterion the new bank has to work with is to retain those staff capable of performing in accordance with the precepts laid down by old-fashioned banks like Lloyds.

When the new Lloyds Banking Group gets to work it must, as it will, act in accordance with the basic principles of banking in order to protect the bank, its customers and its shareholders.

The general public should be pleased with the outcome, despite feeling rather sorry for those who will lose their jobs due to the profligate way that HBOS was run.

Let the MPs of Halifax or Edinburgh put the blame where it belongs, on the bosses of HBOS.

From: Lawrence Kirby, Rushleigh Court, Dore Road, Sheffield.

I OBJECT to Lloyds Bank taking things for granted about the takeover of HBOS as a done thing.

We shareholders have to vote on this and the key is HBOS shareholders, there are a lot of small shareholders, unlike Lloyds, and if it is possible to get them all together they could vote this down because it requires a 75 per cent majority.

I voted against de-mutualisation some years ago and I may vote against this takeover even with the risks this may have for HBOS alone. The share offer of less than two thirds of a Lloyds share for each HBOS share is a poor deal for a bank and building society the size of HBOS.

I am also worried about the HBOS employees being made redundant. If this is voted down, they may have a better chance without Lloyds Bank.

From: H Marjorie Gill, Clarence Drive,
Menston.

AMONG the rejoicing about the interest rate cut, spare a thought for the savers whose income will be reduced by a third, and whose savings made the provision of mortgages possible.

Savers aren't news, so little thought is given to their plight, but it should be. They could well be the next people on the poverty line unless the bank rate increases in the near future, which doesn't appear to be on the cards as far as one can see.

From: R Firth, Woodgarth Court, Campsall.

I WAS appalled at the headline news suggesting that the banks had, only under pressure from the Chancellor, agreed to pass on to lenders the full 1.5 per cent reduction in interest rates (Yorkshire Post, November 8).

It will be recalled that it was less than 24 hours previously that the Bank of England had announced this significant reduction in rates to the great surprise of the finance markets and everyone else.

While mortgage lenders have a significant amount lent on fixed rate mortgages, they will also have, in the present crisis, had to offer high interest fixed savings rate to attract deposits with the stagnation of inter-bank lendings restricting their access to wholesale markets

The Government's claim that they have rescued the banks is rather outrageous since it was the Government's act of taking regulatory duties away from the Bank of England and handing them to the hapless FSA which has contributed most to the present crisis.


Labour lesson from US poll statistics


From: Peter Brown, Connaught Road, Middlesbrough.

I CANNOT help but feel pleased about the victory of the forward-looking and progressive Democrats over the backward-looking Republicans in the American elections.

But here is food for thought. The 36 per cent of the vote that the Labour party managed to win a comfortable majority with in the 2005 election was a great deal less than what the Republicans polled in the disastrous US elections of 2008.

From: Tim Mickleburgh, Littlefield Lane, Grimsby.

I HAVE heard it said that David Cameron wants to ape Barack Obama and successfully win an election as being a candidate for change.

One is a black man in a country that has
never previously elected a black President, the other is an old Etonian. They are not the same, are they?

From: Roger M Dobson, Ash Street, Cross Hills, Keighley.

THE new President-to-be of the United States of America is to be congratulated as the first black president of the US. My only concern is how will he get on with the Scottish caretaker of No 10 Downing Street who is surely on his last legs as Prime Minister of Great Britain. All I can say is heaven help him.