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Financial regulator faces difficult questions over inaction
BLACKFRIAR: LLOYDS TSB has no vested interest in looking after Halifax's Yorkshire branches or its staff.
When Halifax merged with Bank of Scotland in 2001 both sides were keen to safeguard jobs in the Yorkshire town as well as Edinburgh – but this deal is a rescue takeover by Lloyds and staff job security will not be high on the agenda.
There is little doubt that HBOS is a well capitalised bank with a strong future ahead of it, but in the current climate that doesn't seem to matter.
The issue now is could this takeover have been avoided? There are serious questions about why the Financial Services Authority did not step in earlier and stop short sellers from bringing HBOS down.
Short selling is the process where investors make money by betting on the price of a company falling. Why didn't the FSA step in earlier this week and freeze all short selling on HBOS?
Liberal Democrat treasury spokesman Vince Cable has attacked short sellers and advised the Government to make sure that the FSA gets its act together.
But this may well be too late for HBOS. If this deal goes through, Lloyds will be buying HBOS on the cheap.
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Saturday 11 February 2012
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