I simply couldn’t make this one up. One bank’s shares nosedave at the markets due to rumour. The situation gets so bad that they hold talks with another bank for a rescue. The Prime Minister Gordon Brown gets involved, and soon the deal was struck- two banks allowed to merge (well, it’s in fact a takeover). That is what happened when Lloyds TSB and HBoS (Halifax Bank of Scotland) got together in what one business commentator called ‘a shotgun marriage’.
I couldn’t understand why was this allowed to happen. This takeover easily breaks regulatory and competition rules, yet the government ignored everything to ensure that it took place. HBoS, unlike Northern Rock, is deemed to be ‘too big’ a bank to fail, yet a combination of speculators’ nervousness and bad management had got the bank to the edge of bankruptcy.
The problems will not end there. Both HBoS and Lloyds TSB are national banks, with branches in most High Streets, and there were fears that at least a quarter of the jobs of the new ‘superbank’ would certainly be lost, already adding to Britain’s increasing unemployment rate. It seems that Brown will fight to prop up our ailing banking sector, yet refuses to find much needed resources to fund our public services. His half-hearted ‘pledge’ today to clean up banking in this country will be seen by critics as ‘too little, too late’.
Still, there is one silver lining from the merger. At least we will be rid of that prat Howard from the Halifax adverts.