It’s great news that another group want second thoughts on this deal. Let’s hope they can come up with a persuasive enough proposal for more shareholders to vote for it.
It would be better if the government vetoed the merger on competition grounds. They should stand behind any bank as lender of last resort, but should not be buying shares and acting as midwives to mergers which cut competition, choice,and pressure for more efficient banks.


  1. Lola
    November 8, 2008

    Yh, great news it is. I also heard that Jin Sprowart (whom I have met and who is a Good Bloke) was also thinking this way. bUt, did you hear the clown that was wheeled out on R4's Money Box this lunchtime? Talk about a plant. If you can go to listen again and then submit a critique as to why he was talking a fair bit of old cobblers. It had me shouting at the radio – sigh – again!

  2. mikestallard
    November 8, 2008

    You are so right! It was amusing to hear an "expert" being "very angry" about it this morning! That must prove something…..

  3. Robert
    November 9, 2008

    Sir Peter Birt is a very sensible Banker, I worked with him when my then employer was Broker to the Bank of Scotland. I hope he can come up with a credible alternative option, not just for 'nationalistic' reasons!

  4. not an economist
    November 10, 2008

    I don't think this great news.

    My underastyanding from the Sunday Telegraph is that the two chaps behind this were incensed at the takeover precisely because had HBOS waited a short while longer they would have been subject to the recent govt bailout which, they think, would have been a better deal for the share holders. The article seemed to suggest that they wanted HBOS to stand alone so HBOS too could fully benefit from the bailout – i.e., recapitalising thru taxzpayer money rather than private. If this is true then I personally cannot support these two bankers as it would simply increase the burden to the taxpayer. Indeed it highlights what a mess this govt's policy is: creating the option of a govt bailout simply creates an incentive for market participants to go cap in hand to the govt rather than trying to stand on their own two feet.

    You seem to be saying even the current option – i.e., the merger – will involve public money. But it seems it me that this new alternative could prove a bigger burden on the govt purse.

    Reply: Not so. LLoyds wouldn't need public money without the merger – they could raise their capital in other ways. A sensible governemnt would also squeeze the amount it had to put into HBOS and how it put it in, which it could do during a renegotiation.

    1. not an economist
      November 10, 2008

      Okay. I assumed you would be aware of the article(s) in the Sunday Telegraph and so I was wondering why you weren't factoring it in to what you said. I obviouly didn't fully digest what I saw.

      Thanks for the clarification.

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