A merged Lloyds and HBOS would have 28pc of the UK mortgage market and home loans worth £335bn, according to data from the Council of Mortgage Lenders.
Competition rules applying to undertakings in the Treaty establishing the European Union would be worth a quick going-over. It's hard to think such a merger will pass muster.
The Leader of New Labour must think he wasn't signing anything important when he turned up so late in Lisbon.
Update
Robert Peston has stated that: 'The government will announce that in the interests of financial stability it will legislate to over-ride the powers of the Office of Fair Trading and the Competition Commission to block the deal.'
How is the government going to pass any legislation that over-rides the European Union authority here? Is the United Kingdom re-neging on Maastricht (and even earlier treaties).
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16 comments:
If this means the end of EU rule, welcome. Rette sich wer kann.
If I remember correctly Brown has more than once said "we are going to legislate ..." and simply failed to do so
underwriting bank depositors to a greater amount than the £35k being just one
this said, the whole thing is disquieting, I shall probably be pontificating shortly
The 'mouth' and 'trousers' departments of the Brown make-up will now perform a miracle...
Again, he is by-passed by people who know much more, although the BBC still maintains that he was instrumental in the proposed takeover - as if anyone cared what he thought...
Perhaps he'll understand when everyone buys shares in Lloyds TSB, because they'll be backed by one of his absurd 'rescue' plans in a few weeks time!
Richard North knows EU regulations inside out so perhaps he will be able to tell chapter and verse to Brown why he can't just legislate part-rejection of the European treaty, S.
If I were buying HBOS I would want this sorted out first. Brown lies his way along, brushes inconvenient reality out of his way, persuades himself it will be so if he says it can be so - that is part of his psyche.
I sat all morning thinking, 'You can'y merge those banks without EU acceptance and it will be denounced to the Commissioner, by other European banks if not by oother UK banks'. Your professional view wil clear this up, ND.
We know what Mervyn King was in Downing Street for the other day now, Scroblene, the meltdown of the UK financial system and being shouted at until he caved in to pouring more billions into the credit markets.
I caught some spin on the EU angle on the beeb earlier. Apparently the Govt position will be that although Lloyds/TSB/HBOS may be dominant in the UK they aren't reall an EU wide or international company so the EU doesn't need to worry.
Sounds like wishful thinking to me and the EU will ake the opportunity to kick Brown and make it look like his fault for not jouing the Euro.
The EU will let it ride.They might need some merging of their own.But some promises will be required on some other matters though.
'..some promises will be required on some other matters though.'
Oh, yes! That's the unknown unknowns isn't it, BQ? How many promises, to whom, over what time scale, on whose money, for whose benefit?, (well, we know the answer to the last category).
And, at risk of coming over all conspiracy theorist, there is the Scottishness of it all. Goodness Mr Salmond is irritated. He ought to be pleased, looking at the surface of things.
Rather for the EU to decide if they are worried, don't you think GS ? And Brown has made no friends with his bullying and lecturing and general discourtesy over the last 11 years.
no need for po-faced worrying about the eu, what about the parallel example of Suez and Gaz de France?
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/09/03/bcngaz103.xml
one can only imagine the shrieks about ineptitude on here if govt hadnt stepped in and squashed these two together.
lets not mess about trying to find fault everywhere eh? HBOS' fortunes are concern for millions of depositors and small shareholders alike
'...HBOS' fortunes are concern for millions of depositors and small shareholders alike..'
The deals not done yet. Why are there reports of so much being offered for the shares when HSBC says they are worth nothing and only if that is accepted would they help out?
HSBC is right. I don't have much sympathy for the small shareholders of demutualised building societies. They shouldn't have tried to cash in on social capital.
"I don't have much sympathy for the small shareholders of demutualised building societies. They shouldn't have tried to cash in on social capital."
Yes, mutual societies belonged to the whole of the co-operative movement, their capital was not for anybody to appropriate until New Labour robbed it for the benefit of their managers (who increased their salaries manyfold as a result of demutualisation) and of a few insiders (borrowers and depositors).
But you cannot blame those few insiders who were given the opportunity to appropriate more than their fair share of the capital that was going to be robbed anyway.
Which of course is no ground for sympathy, no more than the losses that all shareholders are taking globally today: they should deem themselves lucky their liabilities are limited to the capital they have put into the companies they own.
@Nick Drew said...
//
If I remember correctly Brown has more than once said "we are going to legislate ..." and simply failed to do so
//
Oh COME ON, Nick! No-one believes a word the man utters any more!
The only time to believe him is when he announces he is about to dole out money to some country which is far stronger economically than us.
Legal analysis from Head of Legal re the takeover.
It isn't a EU matter; other aspects (see post) will be got around by Statutory Instrument.
Mmmmm, as easy as that, eh? Er, so this guarantee of a deposit of £35k; will they just get around that then?
21.42.
ND notes that the underwriting of bank depositors for £100,000 (was it?) rather than £35,000 has never been done.
It is disturbing that the purpose of the legislation under which this rescue might be challenged is being flouted. And only inspection will show whether the affairs of these two banks are sufficiently self-contained to concern only the UK and not he EU; if they are so UK centred how come HBOS is so exposed to subprime? The EU commission ought to want a lot of information about this 'merger'.
Bluntly, Brown should be thwarted at every attempt to ride roughshod over rules and regulations. It's bad for his character.
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