The proposed merger between HBOS and Lloyds TSB smells worse and worse. Questions on lying, rule-breaking and improper assurances on the putting aside of competition law have led to demands for a full enquiry.
The Bank of England is leaking that there was a liquidity facility available at an unlimited level and suggest the deal was a "purely commercial decision" and nothing to do with HBOS's survival. The chief executive of Scottish Widows, (part of Lloyds TSB) Archie Kane said:
"This deal was done for commercial reasons. We would not have got into the situation otherwise. We operate on behalf of our shareholders, we do the best thing for our key stakeholders." (Scotsman).
A commercial deal could not have taken place unless competition rules are abandoned. Brown stated that parliamentary powers would be used in the national interest to set aside the competition laws both of the UK and the European Union.
It is boasted by Brown's propaganda mouths that the deal was sealed between Brown and Lloyds TSB boss on Monday evening at a cocktail party! More sensibly, numerous reports, particularly from Lloyds TSB state that this proposed merger is the culmination of a long period of prior discussions and preparation.
Not, then, an intervention in extremis to save a bank that could not be allowed to fail, but part of the news management of a dubious takeover, and a pre Conference rebranding as a decisive and powerful economic and financial leader in the aftermath of the collapse of Brown's reputation.
The ways in which the information was broadcast raises further questions. An announcement should have been made at the beginning of negotiations and shares suspended. Instead the BBC was used to let information out piecemeal while trading in the shares continued to reinforce the notion that a merger, initiated and organised by Brown, was the only, heroic, measure that could save HBOS.
'SNP MSP Alex Neil, a former economic consultant, has written to the FSA, London Stock Exchange and the Bank of England demanding an inquiry into the alleged abuse of the market. (Scotsman). He said:
"It appears that there has been a serious breach of stock market rules, which must be investigated".
An enquiry is the least that is needed, and as HBOS is a Scottish bank it should be under Scottish law, regardless of any FSA investigation.
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2 comments:
Spot on HG. Shocking. Why is there not public outrage about this? Surely some journo must be chasing it? Why are the other banks not shouting about it? What have *they* been offered to stay schtumm?
The shareholders of HBOS had better be shouting soon, Elby, or they will be paying an awful lot to shore-up Brown's near-ruined character as a financial genius.
Guido's commenters have been picking-up on all this since Monday. Which suggests that there is an official 'ignore' instruction gone out to larger media that the attempted reconstruction of Brown as sane and the chap to lead us all to the economic and financial sunlit uplands mustn't be disturbed.
The whole attempted merger is a public disgrace. Perhaps it only needs to hold for the next 5 days. It's just like the 10% tax band abolition dressed as a tax cut. Mortgage costs are going up as I type.
This playing fast and loose with all and any kind of rule or law means I'm ushering the remnants of investments in the UK out of the door and into euroland as fast as can be. Remember the prevention of the export of capital under previous Labour regimes. It'll be £50 notes in a suitcase before long. (Iain Dale says no-one wants them in the UK anyway.)
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