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Will Lloyds' chiefs resign?

Robert Peston | 13:17 UK time, Monday, 9 March 2009

The question of whether Sir Victor Blank and Eric Daniels should remain at the helm of Lloyds Banking Group has become ferociously complicated.

Here's why.

For the original shareholders of Lloyds TSB, the takeover of HBOS has been an almost unmitigated disaster.

The slight mitigation is that in three or four years, the cleaned up, enlarged group just might be a formidable force in retail banking, able to exploit to its profitable advantage an unrivalled share of the market.

lloyds_bosses203pa.jpgBut that's a way off. Right now, the salient fact about the deal is that it hobbled Lloyds - because of HBOS's massive losses on loans to companies and potentially big losses on its massive exposure to the mortgage market.

And to prevent HBOS destroying Lloyds, the battered bank has had to pay a substantial price to us - to taxpayers - for insurance against future losses.

And it has also had to raise additional capital from us, which means that - barring an extraordinary turn of events - the state will end up owning somewhere between 65% and 77% of the bank (up from 43% now).

So many would say that Lloyds is effectively now under state control. And Lloyds has had to give away a vast amount of future profit to its new public-sector owners (that's us) to secure a rescue from us.

If you are a long-standing Lloyds shareholder and you're feeling a little miffed, then I wouldn't be at all surprised.

You wouldn't weep, probably, if Blank and Daniels were defenestrated. In fact, you might give them a little nudge through the vitrine.

But just under half of Lloyds' private sector shareholders were HBOS owners. And - quite frankly - they should be enormous fans of Blank and Daniels.

Because it's quite clear from the details that have been released this weekend on the assets insured by taxpayers - with 83% of these loans coming from the "HBOS legacy book" - that HBOS would have been 100% nationalised were it not for the Lloyds takeover.

Or, to put it another way, HBOS shareholders would have suffered the same ghastly fate as investors in Northern Rock and in Bradford & Bingley: they would have got nothing, not a bean, instead of the bits of Lloyds paper which are worth a few pennies each and are an option on future recovery.

It would therefore be a bit churlish of HBOS's erstwhile owners to call for Blank and Daniels to be guillotined - unless, that is, they have no confidence in their management ability.

But the lesson of recent history is that Daniels and Blank ran Lloyds significantly better than HBOS was managed (until, that is, they made what appears to have been the calamitous decision to buy HBOS).

In a way, of course, this examination of what private-sector shareholders think is irrelevant - because Lloyds is controlled by the state.

And since the prime minister has signalled that he wants Blank and Daniels to stay, that should be a done deal.

Except for one thing.

Daniels and Blank, as a point of principle, did not want state ownership to go over 50%.

And they fought hard to prevent that.

So, some would say, it would be a bit rich - the height of hypocrisy, perhaps - for them to protect themselves from the boot by falling back on the support of the prime minister.

Which is why, some might say, they should take a leaf our of Barclays' book and offer themselves up for re-election - while asking HMG to abstain.

Such a gesture would be an impressive - and unusual - manifestation of bank chiefs putting principle before personal advantage.

I guess it might happen, but why are you looking at me as though I've taken leave of my senses?

Comments

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  • Comment number 1.

    Can anyone answer a question please.

    If the assets covered in APS do not depreciate more that first GBP25bn (about 10%) from now on, would Lloyds still need to pay participation fee of GBP15.6bn to the HMT for insuring their assets?

  • Comment number 2.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 3.

    Interesting. Perhaps another golden goodbye looming, perhaps that is why there is support for them to stay, avoid another Golden Shred.

    Who is Eric Daniels anyway, I thought it was 'Two Fingers O' ''Jack Daniels'' running the show.

  • Comment number 4.

    I would imagine that, as the British Public tend to be terribly short-term in their whims and caprices, these two would be out the window before you could say 'culpability'.

    Most shareholders take a long-term view of their investments, though, and I would hope that such men are given the opportunity to develop their ideas. One need only look at the performance of Premier League football clubs to see how detrimental it is to chop-and-change senior officials at the first sign of trouble. Ahem.

    Blank's an adventurous sort...we need a bit of boldness, surely? Lloyd's had been in decent shape until this offer to step into the breach for Brown. Let's not hang Blank in 'Harridan' Harman's Court of Public Opinion...

  • Comment number 5.

    It seems to be all hanging on the trust thing (again).

    I mean, whether Blank and Daniels should stay or should go, rather depends on whether you trust the idea that within perhaps a couple of years or so, they can turn this huge conglomeration of bits of banking businesses around and turn the enlarged Lloyd's Group into a stable, profitable (to some degree) bank.

    But due to the furore of huge bank bonuses and pensions being paid for failure, it's hard to trust anyone in finance.

    Even if you do go to a particular bank for a loan or a particular company for some type of insurance, the chances are that within a year or two, the company that you thought you could trust has been taken over by another, or your loan, or insurance risk sold on to some other company.

    (AND quite possibly to a company who you wouldn't have dealt with in the first place.)

    Given all of that - really how can anyone be realistically expected to have any confidence in anyone in finance and banking anymore? Effectively the consumers have no choices, these decisions all get made for them by HMG and bank bosses. And that's probably pretty true for shareholders these days too.

    Even if these two guys were brilliant, the chances are they won't be around for long enough to bring the bank around anyhow. I mean they're already effectively working for HMG now rather than the Lloyd's shareholders and if things don't look like they're on the way up soon there's a risk that the group could be fully nationalised.

    Just who can you trust with anything, these days?

  • Comment number 6.

    Robert, if you are asking for public opinion on this for someone higher up - I am not going to answer your question/poll.

  • Comment number 7.

    Hope not. Must remember that Lloyds was well run before the Government encouraged the HBOS deal.

    Eric Daniels really impressed me in a big TV interview have gave at the time the merger with HBOS was announced. Also seemed quite competent at the Parliamentary inquiry.

    Haven't really seen so much of Sir Victor in the media. Not really formed an impression of him. He can stay, if only so we don't have the same argument about whether he deserves a big pension or not. As I said earlier, Lloyds was well run before the HBOS merger, which was a rush-job encouraged by the Government, the media and public opinion in a desperate 11th hour situation last October...

  • Comment number 8.

    Blank and Daniels made a catastrophic blunder taking over HBOS without being aware of the true value of that companies potential losses.

    Particularly at the very time they themselves were looking at their very own survival.

    Will we ever be told the pressure they were put under by panicking politicians only interested in making the right political decisions for themselve?

    I have said before how regrettable the decision was especially as we could have still had at least two independent banks left

    Instead this disaster could now bring about the end of independence for all of the banks as we see confidence ebbing fast and share prices dropping like a stone.

    Blame has to be attached to the government once again as well as those who went along with the decision and more resignations should be sought.

    As far as the original shareholders of both Lloyds and HBOS are concerned they have not only lost the value of the shares in one bank it looks as if they are about to lose them in all banks.

    If only we could turn the clocks back six months and been able to deal with the situation at the time with really competent operators in charge instead of stupid politicians.

    However it is all too late and we are now on a downward path of no return with the black holes in pension schemes getting ever wider and the situations with the banks even more precarious.

    A certain Gordon Brown has to call it a day and let someone else take charge. He can no longer take any credit for saving the banks. Destroying some unnecessarily. Yes!







  • Comment number 9.

    I did kinda warn everyone that this would be disaterous for Lloyds before this all happened. What will be interesting is to see how the original Lloyds shareholders react - the takeover has been disasterous for them, and was, by all accounts (at least initially), a shotgun marriage presided over by HMG. Surely some case for redress?

  • Comment number 10.

    I dont care about Lloyds much, the pensions -it was a done deal. China, last people on my mind.

    But I do care for Britian and our BBC and WoW what poor service it is providing in this Crunch.

    for Example :
    Pound slides as bank shares hit
    The pound sinks back below $1.40 to a six-week low as UK banking shares suffer heavy falls.

    The Pound slides because we are PRINTING MONEY.

    Lets tell it how it is...

  • Comment number 11.


    The managers seem to have done a pretty good due-diligence job on the deal from their own perspective. They knew that even if it went wrong commercially they were covered personally because they were doing what the govt wanted and the govt would end up owning the bank.

    They are now set up to run a bank with massively increased market share, all the bad debts covered by govt insurance and largely funded by the Bank of England. The govt has even set up a nicely big gap between the amount they pay to borrow money from it and the amount they can charge for loans to customers. In a couple of years they are going to look really good and will be back on big bonuses as well as stock option gains.

    The only downside is that they need to report to Alastair Darling via the civil service for a couple of years. I'd say there is a good chance they will quit!

  • Comment number 12.

    Should Gordon Brown resign?

    It was him and comical Ali that ‘pushed’ the deal through!

  • Comment number 13.

    This is a great question mixing the theory of bounded rationality with game theory. There is actually a way to work out the technically "correct" decision as to what the shareholders should do. Here is the answer:
    http://www.knowingandmaking.com/2009/03/should-lloyds-executives-be-sacked.html

  • Comment number 14.

    1 (VitaliG): it's an insurance premium. If your house doesn't burn down, you wouldn't get a refund on your fire insurance at the end of the year. So the answer is yes, they do still have to pay it.

  • Comment number 15.

    Whilst I do think you highlight a good point I can't help but feel that you missed something

    I might agree that Lloyds should have done more investigation, but we don't seem to know exactly what was discussed at the party where the deal was agreed to.

    If Lloyds were ahead of the curve and recognised public opinion with regard to "greedy Bankers" and an era where they wouldn't be able to continue their dividend growth, it becomes very convenient to grasp a huge asset/liability to take the blame knowing that in 5 or so years the larger group will be hugely profitable once again.

    I think that you need to investigate further to see if there are any sweeteners in the deal, written off as extra support from the government.

    What is also obvious is where does Barclays fit into this overall plan. Does Brown consider it as the "one that got away", and is/will that fact actually contribute to a dilution of the original "plan" from the treasury?

  • Comment number 16.

    Why should these execs be protected and keep their jobs and pensions, when thousands of other mere mortals loose their jobs and pensions for acts of incompetence. And these execs are incompetent.

    We have known for some considerable time, well before the credit crunch was even thought of, that the British banking sector was heavily involved in dodgy high risk contracts, bonds, and other financial instruments invented to cloak the American sub-prime disaster. To go one would be repeating my self and history.

    I'm afraid these captains knew the risks they were taking, and so it follows, they must go down with the ship. They are no loss to the sector and it's about time new blood is brought in to rebuild our banking sector.

  • Comment number 17.

    Can we get some clearer indication of what is happening to GM/Opel

    Mandy said on Andrew Marr yesterday that he was having meetings this week, and I think that'll you'll be privy to those should you chose to inform us

  • Comment number 18.

    We are seriously all doomed now. We have to buy gold and bury it somewhere.

    http://moneyistheway.blogspot.com/2009/03/peter-munk-gold-bug.html

  • Comment number 19.

    Is Eric Danielsin any way related to Paul Daniels or did he learn the unforbidden AAArts from the pied piper of Sedgfield who knew how to play with 0 up his sleeve

  • Comment number 20.

    By now.........Who cares ???????

  • Comment number 21.

    It was obvious to almost everyone that the HBOS deal was a completely stupid idea. Which makes one think there was some sort of other motive to take over such a basket case. The whole thing stinks! Shareholders have absolutely no power at all..It seems these guys can just steam roll the smaller shareholders in order to line their own pockets..The larger shareholders are no doubt pension funds controlled by other bankers.

  • Comment number 22.

    Labour now in complete control of money of whole of uk, everyone ‘Be afraid, very afraid’

  • Comment number 23.

    Seems to me Robert you are conducting the wrong poll here ?

    It is acknowledged that Gordon Brown raised and pushed the Lloyds-HBOS merger so perhaps the question on the table given the end result should be :

    Should Gordon Brown resign for committing HMG to such massive debt exposure ?

    Not asking for an apology -- just his resignation -- period.

    Lloyds were fine until GB needed them to bail out another bank based, dare I say it -- in Scotland.

  • Comment number 24.

    The terms of Government's so called "bail out" are draconian for the banks. After every "bail out" the banks shares fall. Shareholders lose and lose. But Government gained control over large chunk of banking sector in the UK. Banks are now turning into Government plaything.

    In the end of the day Government, FSA, BoE were encouraging as little regulation as possible and as many debt as possible. They are as guilty as banks for creating this crisis. FSA, quite simply, failed in its main duty. They were ticking the boxes and did not notice an elephant.

    I am a shareholder in Lloyds and hoped that HMG would nicer to Lloyds, especially considering the fact that it saved HBOS and saved HMG troubles with HBOS. And also because I thought that UK wants to have private (capitalist) banking and not socialist banking.

  • Comment number 25.

    the board at lloyds shouldnt take a leaf out fo barclays and just simply put themselves up for re -election.

    they should do the decent thing and resign and let someone else take over.

    you have inadvertantly compared the two main men at lloyds banking group to that of the two main men of barclays who ahve put themselves up for re election.

    trouble is such a comparison is badly timed because barclays are a profitable led bank where lloyds banking group ISNT.

  • Comment number 26.

    Robert

    The answer is quite clear. THEY SHOULD GO.

    They did not act in the best interests of the bank, for one, not doing due diligence in an acquisition.

    Why? Because you're doing your friend, the Prime Minister, a favour isn't I'm afraid in any banking text books (not that many bank CEOs/Chairman read them).

    In another time and place the Prime Minister would be up in front of a prosecution procedings for flagrantly flouting the (takeover) law.

    If LloydsTSB wanted anything from this deal they should have insisted in taking only personal customer deposits and accounts.

    The mortgages and corporate book could have followed after due diligence. Price could have been negotiated vis-a-vis overall credit risk.

    During this time the Government could have taken temporary ownership and could have course run an auction on the book.

    What was left would have been basically the toxic rump bank, probably less than that being insured now.

    HBOS could then have been run down and closed whilst LloydsTSB would have benefited without having to be nationalised.

    It's not that complicated..........only if you want to continue with Labour spin.

    In days gone by people would visit hangings.

    This is right up there with criminal transgressions whethr individual or governmental............maybe we should bring them back......

  • Comment number 27.

    My bet is they won't resign.

    What does it matter anyway as Gerald Celeste latest prediction is that the US has already entered the start of the next Great Depression.

    http://creditcrunchedoutinuk.blogspot.com/

  • Comment number 28.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 29.

    One cannot milk the scapegoat. Even mr hindsight can't.

    What could possibly be gained of getting rid of these men and letting some new faces run a difficult ship in stormy weather?

    Change their packages to allign these to stakeholder interests and let them lead.



  • Comment number 30.

    Dont see what all the fuss is about, really. The Lloyds TSB board made a unanimous decision to recommend the acquisition, supported by their financial advisers and the joint sponsors- so the shareholder prospectus says. I dont know why therefore you are concentrating on two individuals. This followed senior management commercial reviews at both the Lloyds TSB and HBOS ends. Should all of these people be asked to resign as well?

    I remember the FSA had told Lloyds TSB they had to raise billions of new capital if they were to "go it alone".The Board werent sure they could raise that, and if so, on what terms.

    A 10billion capital negative was talked about then on the HBOS side. Lord Turner, when the recent losses from the HBOS book were announced, said that the figures werent a million miles away from the FSA stress test results in October.The prospectus said that full evaluation would take place over time. The shareholders could have voted against or provided the new capital.

    What's your gripe?

  • Comment number 31.

    "The slight mitigation is that in three or four years, the cleaned up, enlarged group just might be a formidable force in retail banking, able to exploit to its profitable advantage an unrivalled share of the market."

    And may if not properly regulted bring the counrty to it's knees once again.....

    ..... the 'Properly Regulated' bit is that sticking point, banks can't be allowed to be the force thay once were and I know that within the Financial Services sector they may well be King soon - but share prices and dividends may never be what they once were...... or appeared to be

  • Comment number 32.

    The answer to whether the merger of Lloyds amd HBOS was a good thing depends on your perspective. If you are a Lloyds shareholder, concerned about the short term, the answer is no. If you were a HBOS shareholder the answer is probably yes, as the alternative was likely Northern Rock style nationalisation. If you are (like me) a tax payer then probably, on balance, the answer is yes, as the costs and risks involved in nationalising HBOS are probably greater than the costs and risks involved in the merged banks.

    Which is why the government wanted and supported the merger. But the decision was Lloyds, and it is clear that due diligence was not carried out diligently. Good reason then to sack the management, but tax payers will over the next few years, be better off as a result of the merger than they would otherwise have been.

    So in conclusion:

    1. Lloyds shareholder should sack Blank & Daniels without compensation for ruining Lloyds

    2. Blank and Daniels should (in a couple of years) be given a peerage for services to banking and the public finances for saving HBOS from nationalisation

  • Comment number 33.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 34.

    So some people feel that Daniels/Blank did a good job until they did a terrible job? Doesn't that mean that in aggregate they did a terrible job? For the future, shareholders need the best management they can get. Are the current executives, with their terrible lack of insight and judgement, really up for the job? Having said that, shareholders voted in favour of the deal, so it's their own fault.

  • Comment number 35.


    Re: 'HBOS massive exposure to mortgage market'.

    In my simple world, it would seem the mortgage book will have been acquired over 25 years. Doesn't this mean it is the mortgages written in the last (for the sake of arguement) 5 years that are at greatest risk?

    Also mortgages are secured. So a proportion of the loan will be recoverable. Even if someone has a 110% mortgage, and house prices drop 40%, the bank will still recover 54.5% of the debt, and the mortgagee will still be liable for the balance.

    Does anyone know how much of the funding package is set aside to cover mortgage risk?

    And the bonus question - for the caravan and beach holiday - where on earth did the rest of the money go?

    Wouldn't it be relatively easy for Lloyds to estimate the size of this risk based on publicly available information? In which case doesn't the culpability of the Lloyds directors depend on how much they could have foreseen the extent of the non-mortgage debt?

    Lots of assumptions in this - but I am sure one of you bright people will be able to set me straight :)

    Thanks
    TheShinyTortoise.

  • Comment number 36.

    It's not the leaders of Lloyds that should resign, it's the two idiots who forced the takeover/ merger on them without any thought to the possible consequences. Brown and Darling were culpable and should face the music ; the first things they should make public are the minutes of the various meetings that led to the merger and the reason they decided that a merger/ takeover was the best and only solution. It seems increasingly obvious that with their reluctance to release these documents, any scrutiny of these minutes would reinforce the notion of fiscal incompetence on the governments part.

  • Comment number 37.

    I find the comparisons interesting. RBS was basically well run but did one catastrophic greedy deal and their ex-boss is seen as the world's worst banker.

    These two did a similar greedy deal but in circumstances where they should have known better - and they haven't even resigned.

    Of course the reason may be that they were forced to do it - in which case the person who forced them should resign - and I don't mean some junior minister.

    These two should be demerged and Howard's Bank of Scotland thrown on the scrapheap.

  • Comment number 38.

    so it could be BLANK BANNED FROM BLAND BANK?

    good to have you back Robert; the stock market fell at quite the rate in your absence and everything continued to get Mullered here on these shores

    you may want to make a quick fact-finding trip to Borsetshire soon BTW; if you haven't heard, Matt Crawford has been charged with fraud and Tom Archer's sausage business is in serious jeopardy

  • Comment number 39.

    The minute people found out Golem Brown was behind the deal they should've sold any and all Lloyds TSB stock they held. The Golem is a mumbling, stumbling, money-printing, wealth-destroying monster.

  • Comment number 40.

    If men were dominos, Victor would be the double blank.

    (With apologies to P G Wodehouse)

  • Comment number 41.

    on the whole ongoing sad issue of the failed and failing banks, I posted this on your China report but will repost it here as it seems more relevant:

    226. At 12:16pm on 09 Mar 2009, somali_pirate_SP500 wrote:

    it's interesting to see the BBC stories from Mandelson: one saying 'Nationalisation of banks not needed' and the other saying 'Royal Mail last chance'

    The pro-Big Business, anti-public service neo-con agenda of Mandelson, representing the Blairite/Thatcherite view inside the current govt needs some analysis. I suspect Brown is not quite so anti-nationalisation, so perhaps a struggle for control is going on?

    Also very interesting to see these comments from US Republican senators, reported in yesterday's NYTimes:

    John McCain and Richard C. Shelby, two high-profile Republican senators, said on Sunday that the government should allow a number of the biggest American banks to fail. 'Close them down, get them out of business,' Mr. Shelby, the senior Republican on the Banking Committee, told ABC's 'This Week With George Stephanopoulos.' 'If they're dead, they ought to be buried.'

    While the Alabama senator did not say which banks to shutter, he suggested that Citigroup might be on that list, saying the bank has 'always been a problem child.'

    Mr. McCain, appearing on 'Fox News Sunday,' echoed that sentiment without identifying any banks. Mr. McCain, who lost the presidential election last November, also accused the Treasury Department of avoiding the 'hard decision? to let 'these banks fail.'

    --------------------------

    all these right-wingers talking about how bad nationalisation would be is starting to make me suspect that the nationalisation of some of the big US banks (Citi, BoA) and completion of the formality of nationalising RBS and Lloyds is fast approaching, despite all that Mandelson (and Geithner in the US) might try to do to stop it

    if the UK govt didn't have such a blinkered view that everything private is good and public is bad, they would surely concentrate efforts on setting up a new National Investment Bank and a Nat'l Savings Bank and get involved in direct stimulus rather than putting it through 'zombie' banks such as RBS and Lloyds

    either way, if I were a Lloyds or RBS shareholder I think I'd throw in the towel now and save whatever remaining equity exists, as we have several more months of very bad news to come (at least) and at some stage that will force the govt to nationalise (temporarily) both here and in US; American shareholders will be able to seek compensation in the courts but can't see that happening here

    as for Bland and the other merchant bankers, who cares what becomes of 'em; not me, though I do hope someone in govt reads their severance details before agreeing to them this time

  • Comment number 42.

    Where's the bottom of the market? All these events have a natural 12-18 month lag before the man in the street sees it. 2012 looks a good bet right now if we are lucky. In the meantime, the shrinkage of the UK economy may be 5% once all the bad news emerges. That means we are still 95% of the size we were at our 2007 peak.

    Too much doom and gloom for me. Let's seize some opportunities. There'll be plenty.

  • Comment number 43.

    Is there any suspicion or evidence to show that the government coerced Lloyds into taking over HBoS?

    It seems like a very convenient turn of events for the Government, whilst offering Lloyds an investment of some significance. Afterall the government did not want to be seen to nationalise the banks.

    I wonder if there are a few old school socialists who see this as just what they wanted.

  • Comment number 44.

    .........if Lloyds was so fine before the HBOS acquisition, then how come they have gone cap in hand to the tax payer for £44 billion? Seems to me that they would have required nationalising anyway to stay in business. So much for a "conservative" bank.

  • Comment number 45.

    "Almost unmitigated disaster"? It has been a total disaster from both the Lloyds shareholders and the UK taxpayers perspective.

    They both must go and now without a pay off or a pension uplift but we all know they won't for one very simple reason.

    The merger was put through at the behest of Gordon Brown and guess who is their largest shareholder now? Yes the UK Government led by the same Gordon Brown!

    Had HBOS have been left to rot we now would have three independent UK High Street Banks in HSBC, Barclays and Lloyds TSB plus four bust High Street banks in RBS, Nat West, Halifax and Bank of Scotland.

    We now have only two proper functioning banks plus an extra in the dead man walking column.

    Who wants to place a bet that Barclays and HSBC will use their positions and the lack of effective competition from the nationalised banks to increase profits at the expense of UK Corporate and Private customers?

  • Comment number 46.

    Under a different story (about Microsoft) - http://news.bbc.co.uk/1/hi/technology/7932149.stm - there's an interesting comment from Neil Barrett.

    "US firms follow the Harvard school of competition: find a market, dominate that market and then use that domination to beat the competition into submission.
    US firms come here, speak the same language (especially in Britain), and think they are working in an identical environment. They're not, because in Europe, that type business model isn't remotely fair."

    I can't help but think that is some parallel with what has happened to our banking industry.

    The UK banking industry has tried to copy the US one and tried to "beat the competition into submission". However, all they have actually done with their arrogance and attempted dominance is beat their companies into the ground and their customers and shareholders into poverty.

    We need a new model, a new way of doing things, more outcome-focussed and more customer-focussed.

    Perhaps, just perhaps, the Lloyds Group (and RBS) could be some embryonic start to that.

  • Comment number 47.

    They should stay- HMG more or less twisted their arm and shareholders should take a longer view- even without the disaster of HBoS, the share price would have tumbled as Lloyd's were heavy into mortgages and personal loans.

    A real issue is why don't HMG stop shorting- with the current sentiment it is a one way bet and is making matters graver than I they are. I cannot see any reason to continue to allow shorting in the current climate in any shares- it adds no value and allows some to take a short term profit at the expense of more worry than need be for shareholders and all those in private pensions- defined benefit or defined contribution.

    We seem to have a multitude of paradoxes- too much of the 'value' in share indexes was financial and banking stocks and they are being hammered and shorted- we spend too much and now we need to spend more- we borrowed too much and now we need to avoid paying it back and spending less and we consumed too much energy, resources and drove our cars too much but we must not stop, we are too fat but should not stop spending money on food- it goes on and on.

    the only thing to do is what we always do in times of crisis- go and have a cup of tea

  • Comment number 48.

    All Browns quiet cronyism is come home to roost and what a mess it is.

    This is now not about economics but the classic disparity between Socialism and Conservatism.

    Do we want an endlesslessly interfering government who only see's tax as the answer or one that see's individuals actually know better.

    Labour is wasting taxpayers money so fast we are losing the ability to appreciate the damage it is causing.

    We can only hope that what they have created can be undoen asap and real time economics used not the airey fairey La La land economics of the playground.

    Let people pay less tax and let companies go to the markets for funds.

    As the turn of phrase has been used before: never have so few caused so much damage to so many.

    We ned to get rid of the so called great and good and out in good men and women who are true and honest seeing their roles as servants of the people not their own bank accounts and careers. We need directors who understand what they are getting paid for and having the correct cjheckjs and balances in place to stop bully boy egotistical maniacs running riot.

    It can happen but what looks clear is not on this Prime Ministers patch.

    The old boy network never worked for anyone save thise in it. At some time soon the greater good of the people will be addressed but its is now clear it wont happen under this governments remaining tenure.

    Of course Blank should go and Daniels put on strict notice, but they must not be alone, every clearing bank needs a clear out, and to assume they can;t be replaced is a joke. Of course they all can.

    Lets face it if this is what the great and the good deliver then give us all the second division any day.






  • Comment number 49.

    And just who was it who put Blank and Daniels under so much pressure to rescue HBOS in the first place?

  • Comment number 50.

    I just read a very enlightend article about the curruent economic collapse here

    http://ambercat.blogspot.com/2009/03/true-reason-behind-economic-collapse.html

    It definately bears further thought and investigation

  • Comment number 51.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • Comment number 52.

    RP says: 'Which is why, some might say, they should take a leaf out of Barclays' book and offer themselves up for re-election - while asking HMG to abstain.

    Such a gesture would be an impressive - and unusual - manifestation of bank chiefs putting principle before personal advantage'.

    I think it would have been an even better blog if you had also appropriately included The First Lord of the Treasury, the Prime Minister. The buck has stopped on his desk even though he is pretending not to be able to see it.

    The so called Gnomes of Zurich will discount the £ as long he remains The First Lord of the Treasury. Their fears that he will use his huge powers by deploying huge sums of tax payers money, 1st in attempting to restore his reputation and only 2nd to restoring the UK's economy will remain as long as anyone is such an invidious position remains.

    The removal of this avoidable discount to the population's wealth should be of the highest priority to any governing party.


  • Comment number 53.

    Robert, WE MUST MOVE ON.

    What has gone has gone.

    Does it matter any more?

    Seriously, if HBOS has been insured and underwritten by HMG and Lloyds has also been given guarantees, then what is the problem?

    Ok so the shareholders are miffed, but holding shares is for the LONG TERM NOT SHORT TERM GAIN, is it not?

    The future is bright if only people will stop whingeing about short term profit and what they have lost.

    WE HAVE ALL LOST BUT WE CANNOT TURN THE CLOCK BACK.

    SO LETS BE POSITIVE, BUY SHARES IN THE BANKS AT RECORD CHEAP PRICES AND LOOK TO ONE DAY IN THE FUTURE MAKING GOOD SOME OF THE LOSSES.

    Tempus Fugit. Time flies.

    Time marches on.

    Forward not backwards.

  • Comment number 54.

    Welcome back from China !

    Daniels seems to be under terrific personal stress - well, under these circumstances who wouldn't be - so does he really want to soldier on ?

    Noblesse oblige, I suppose.

  • Comment number 55.

    All major economic events over the last 12 years lead straight to the present Prime Minister, yet he denies any wrong doing and blames everyone else.

    Are we really expecting him amd his 'team' to get things right now.

    Anyone with half an ounce of intelligence knows Blank must go but so must Brown and all his cronies.

    The Scottish legislature whilst crying daily for independence has shown itself to be a joke hopelessly inadequate in any level of supervisory control over its institutions and its present silence is woeful.

    The FSA talks till it is blue in eth face and needs a major overhaul and with eth governments tacit acceptance of a European regulator sums up their opinion of it perfectly.

    The key is with any problem to get to grips with all the information and until the banks and insurance compoanies come clean we will not be able to move on and the taxpayer will be drip fed information piecemeal as against what it deserves the whole truth and nothing but the truth.

    If they do not supply their full financial liabilities as they are duty bound to then ity must be assumed teh respective boards are not fit for purpose and in breach of their contractual obligations.

    Shareholders should then seek to claim fraud against them and make them wholly liable.

    Perhaps that threat might wake up these ex-never-to-be-seen-again-masters-of-the-universe to the point where they finally appreciate the world has changed.

    What I would like to know is what muppet thought up the notion that you get a bonus when you don't deliver. He/she should also be sued.

    We need some good old fashioned law suits flying around here not just against Maddoff and Stanford. We need action against boards of directors and regulators for complicit activity against the public and shareholders best interests.

    Labour will be wiped out for a decade at least so we will have easy retribution there.
    All this gentile inactivity to find the perpetrators of this mismanagement is an insult to us all.

    We must have the clearout we knwo we need and a basis change in thinking away from Keynes to reality.

    At least them we will leave our kids with less liabilities than they are heading for right now!

  • Comment number 56.

    To whom have Daniels and Blank had a fiduciary responsibility - the Lloyds TSB shareholders. Are they happy this morning? No - they have been wiped out in 6 mths . Under normal circumstances any sensible manager would do the honourable thing; normal rules do not appear to apply in the Alice in Wonderland world of modern banking.

    Whether Llloyds TSB shareholders owned HBOS stock also is neither here nor there. The only reason they are being kept in place is due to Gordon Brown (hardly a reassuring endorsement to the taxpayer). The word scandal hardly does justice to what is going on here.

  • Comment number 57.

    Rather like burning witches after a failed harvest, sacking prominent bankers - or restricting their ludicrous pensions - may be welcomed by the bloodthirsty mob (shareholders in this case), but won't make a lot of difference to the pickle we're all in. And it assumes that waiting in the wings are hitherto undiscovered managers with all the requisite qualities and none of the defects of the previous bunch. What's more, the so-called "high flying" civil servants put in to supervise the government's newly acquired bank holdings don't seem to have got off to a promising start, if their reception by the Commons Select Committee is anything to go by.

    Back in the days of Dad's Army, when Capt. Mainwaring sat behind the manager's desk and actually knew the people he lent money to, sub-prime lending would have been unthinkable. In fact, banks remained quite simple organisations until a decade or two ago, and arguably could be run by quite simple people. Now they've been turned into highly complex businesses where it seems difficult to avoid the conclusion that the management's skills haven't increased in proportion.

    My vote would be for simplification rather than trying to manage the complexity. But unfortunately even simplification needs talented managers!

  • Comment number 58.

    Until Brown admits guilt for the mess we are in its hard to kick eth bankers alone.


    Once he does we can move ahead, it really is that simple. He is a walking dead man and the USA see's that as does the voting public here.

    Let us all pray he does the right thing and quits asap!

  • Comment number 59.

    I always said that HBOS should have taken over Lloyds ,now it looks as though they have INDEED....taken them over to the knackers yard to be turned into wall paper glue and be used in conjunction with the quaintitative teasing now being proposed by the Tutts who will not let go of their mammorial power.

    These babbleonion types always end up in tiers...for souveneers was all they gave us ...memmories of a LUV type depression that might not have been ..so lets forgive and forget and turn our tiers of regret once more into tiers of haplessness.

    What are the diddlemen of naughtyAAA's cooking up for us now?

    The only sensible thing left to say to to Lloyds HBOS is ...

    HOW NOW BROWN COW.?

    or how about


    THE LICKQUIDITY IN SPAIN FALLS MAINLY DOWN THE DRAIN !

    LOL

  • Comment number 60.

    The government are being very cunning with this stealth nationalisation to avoid potential legal compensation claims. Wouldn't it have been fairer to have nationalised the weakest banks last year and paid some price for them to compensate the shareholders? After all shareholders are tax payers too and are not really the people who should be significantly loosing out in this crisis, there are a long cue of people ahead of them much more worthy; senior bankers, politicians, the financial press. Wouldn't it be more reasonable for the government to promise the shareholders they could either receive the shareholding back when the government had been paid back, or when the banks were re-privatised they would get first refusal on the offering at discounted prices to the market.
    I'm sure that some device could have been constructed to reduce the pain being felt by the shareholders at the moment. After all the reason these banks are failing is due to a failure of regulation and systemic management by this government and it's agencies. The reason that the government have chosen this section of the public to shoulder the pain is because they do not expect them to storm the barricades, maybe it's time they laid down their copies of the daily mail and took up arms.

  • Comment number 61.

    I think that we are all being sold a red herring -- never mind all this conjecture -- why has the heat apparently come off of Mr Goodwin ??
    GB usually relies on new news items to obfuscate the really pertinent issues and we all seem to be falling for it once again !!

  • Comment number 62.

    Should we not be discussing why the government forced them into the HBOS deal? Are we going to be blind sided again?
    Let's see a report on the governments activity and promises to Lloyds TSB to get them to forsake their due diligence.

  • Comment number 63.

    With a CABAL spelt BDVDB (Brown, Darling, Vadera, Daniels and Blank) no one will resign. Until the public actually know the intimate details of the Lloyds/HBOS takeover this whole sad affair will retain a very nasty smell.

  • Comment number 64.

    Just as competition rules where so disgracefully waived to allow this misbegotten marriage of convenience, might it not come to pass that in the future when this goliath returns to profit that a divorce is forced upon it?

  • Comment number 65.

    Just been on the phone to De La Rue, several opportunities exists for printers.

    Anyone seen what's happening with the GBP ???


    As PacMan would say 'Meow, Meow Meow Meow PLINK!'

  • Comment number 66.

    Good to get some analysis on how far nationalisation of UK industry has effectively gone in terms of the banks assets/liabilities in the form of shareholdings and bonds/loans in UK companies.

    "In the valley of the blind the one eyed man is King."

  • Comment number 67.

    Of course they will not resign.

    They will want £697,000 per annum pensions too.

  • Comment number 68.

    Lloyds TSB was, until the time of the HBOS deal, without doubt the best run of the UK banks and had none of the terrible exposure of the other banks to toxic assets and poor loan decisions. Mr Daniels and Sir Victor did a first rate job.

    Why Lloyds TSB took in HBOS I do not know, and perhaps the truth will never be known. It has turned out to be a very bad decision. But in my book you do not sink a man, much less two men, for one bad decision.

    I for one am sorry for the two men and wish them the best possible outcome. They do not deserve to be pilloried.

  • Comment number 69.

    And my personal ‘Fine upstanding member of the community award for 2009 (Yeah she’s that good!) goes to Jacqui Smith!

    3 Cheers for Jacqui everyone, she has shown us the way lets ALL get aboard!

  • Comment number 70.

    I still can't see how this merger was permitted to go through without a gun being held to the heads of Lloyds TSB's directors.

    The incentive of an 'increased share' of UK retailing banking is worthless when you consider half of HBoS's branches will need to be closed (the administrative costs and redundancy payouts from doing so will dwarf Fatcat Fred's pension), their position and reputation in the mortgage market is blackened beyond repair, unsecured personal loans don't exist any more and their corporate 'assets' fell into an accounting Hadron Collider. What 'retail banking'?

    A merger with RBS would've been more practical (another crippled bank with black hole books), or using Northern Rock to annex HBoS as part of the BoE. Then asset strip and sell portions of both banks back to the private sector at a higher premium.

    As it is Lloyds TSB will now be using the money they SHOULD be injecting as new loans and cash fluidity into the market to stuff up the holes in the HBoS colander.

    By crippling Lloyds TSB to prevent an RBS/HBoS one-bank-in-Scotland situation, Brown has extended the recession.

  • Comment number 71.

    The fatal error of Lloyds management was to do two things at the same time. This usually means you have taken you eye off the ball and have lost the plot.

    To try to take over HBOS was one thing but to take over HBOS in the middle of a banking collapse was something else. They should have just focussed on the banking collapse.

    Victor Blank is a very nice man and so I feel sorry for him, but he has made a collosal mistake.

  • Comment number 72.

    "The question of whether Sir Victor Blank and Eric Daniels should remain at the helm of Lloyds Banking Group has become ferociously complicated."

    Robert,

    Nice try, but you don't actually expect us to believe that guff do you.

    There is nothing more unedifying than abject failures and cuckoos trying to hold on to their feather nests and nest eggs...... and the BBC hosting it too and not ensuring that the complicit accesories before and after the fact, the Labour Cabinet cabal are rounded up for the stocks, to be publicly pelt and pilloried with the rotten eggs they so thoroughly deserve is also lamentable, but it is hardly surprising given that they have so much past form for being such a useless wimpy tool for championing the Truth, so ...... what's your excuse, Robert, to so suddenly start toeing the line ..... and just when you were getting into your stride too.

    And I shall not speculate further on that, as there is much too much going on underground and behind the scenes and in the Virtual Cloud of Enlightened Command and Control, for anyone into Fitness for Future Purpose to waste any of their Time or Effort but would just leave it hanging there for others with the inclination and the intelligence to ponder and/or fill in the spaces.

    And all such developments are far richer pickings.... beyond wildest dreams ..... for everyone and a business editor/news correspondent too.

  • Comment number 73.

    I can't see this being a complicated issue.... Daniels and Blank essentially sank their bank with the HBOS takeover.

    They new there were risks, should have held out so that they could complete their due diligence, they didn't - they were too focussed on owning a massive share of the UK banking market (which doesn't suit the consumer/taxpayer/whatever you like to call us).

    THEY SHOULD BE FIRED.

  • Comment number 74.

    The government clearly wanted Lloyds and HBOS to merdge in order to produce an enlarged AAA's hole to test and test out their quantitative wheesing ,its the sort of balls one expects from a Labour court with their trousirs down

  • Comment number 75.

    why are you looking at me as though I've taken leave of my senses? - because you have ..

    Lloyds did the government a favour without exerting due diligance and the expectation that Lloyds would benefit hugely from the takever of HBOS

    They have not, and HBOS was a basket case that might have been better sorted out on it own. If I was a Lloyds shareholder I would be fuming and calling for their heads for their error of judgement regardless of the HBOS shareholders views

    But since when since a banker and point of principle appear in the same sentence ?

    Shame that 'my word is my bond' seems out of fashion ..!

  • Comment number 76.

    It is very annoying for this of us in former HBoS Corporate Companies that are nothing to do with the bank that we have been told the bonus will not be paid when other diviosions are being paid one. This is the mostunfair aspect - everyone earning under £39,000 should get one - we are at the "coalface" as it were and not earning these huge bonuses

  • Comment number 77.

    As a big time loser with LLoyds Bank shares I am not too happy that this mess results from Blank cosying up to Gordon Brown.
    However if the shareholders make a legal claim and Blank and Daniels were to leave then there would be a greater chance of 100%nationalisation. This would leave the shareholders with no chance of recovering anything.

  • Comment number 78.

    How will history compare Sir Fred Goodwin with Eric Daniels?

    Both were chief executives of large UK banks that are now (or soon will be) majority owned by the taxpayer. Both banks have ended up in this situation through an ill advised takeover of another bank - ABN Amro in the case of RBS and HBOS in the case of Lloyds.

    Some will say that the Lloyds/HBOS deal is different as Lloyds was stepping in to help the Government and avoid a further loss of confidence in the banking industry. But that misses the point that Eric Daniels and Andy Hornby had already been speaking about a possible merger and so the problems at HBOS simply provided Lloyds with the ability to do a deal that they wanted to do anyway.

  • Comment number 79.

    Hold on a minute. It was Gordon Brown who arranged the shotgun wedding of Lloyds & HBOS. In his usual fashion we get his well rehersed "it wasn't me gov" line whilst he moves on to another cunning plan by the name of quantitive easing. Now that he's sold the family silver (sorry gold) isn't it a case of him gearing up UK plc on the back of assets of dubious quality? Sounds a bit familar to me - didn't Fred Goodwin do that?

  • Comment number 80.

    Your fellow BBC journalist put it well some time ago.

    Mr Paul Mason : discussed the 1997 Architects of the current FAILED tripatite system of Regulation. Designed, developed, and promoted by :

    1. Mr Gordon Brown :
    2. Mr Ed Balls;
    3. Sir Gus O'Donnell

    The Public, Shareholders, Pensioners, Businesses large and small...and the UK's immediate prosperity.... all betrayed by their actions.

    The three listed above should be the ones to resign and seek re-election. And it's about time Senior Civil Servants were also brought to account.

    Voces populi ! We cannot live by bread and circuses alone.

    Can we please end the circus NOW.

  • Comment number 81.

    However anyone attempts to dress this up, as I stated before the merger was approved......

    there was no sense in Lloyds buying HBOS epecially when it was clear they had too little time to look through the details correctly.

    It was a very bad decision and the senior execs are as culpable as Mr Goodwin and co (in buying ABN). Equally culpable is Brown and his cohort that pushed the deal through.

    bw

  • Comment number 82.

    This farce becomes more like an episode of Blackadder every day. General Melchett-Broon aims the artillery at Daniels et al in order to move his desk 6 inches closer to Edinburgh, ably assisted by Captain Uriah Darling. In the meantime Ed and Yvette Balls(drick) have their socks off in order to do the maths. All we need is Flash Mandy to make a guest appearance with a late rescue bid from Rio - I have heard that it only requires the sight of a brazilian to produce that "woof woof". And, of course, it all ends in tragedy - except for Broon who rides off to numerous bank non-exec jobs after being relieved of his post by the electorate.

  • Comment number 83.

    The question isn't complicated at all really.

    The group which has 'suffered' most, the LloydsTSB shareholders had the opportunity to vote on the HBOS merger. Plenty of information and views were expressed at the time both for and against and the shareholders had the option to turn it down.

    They didn't.

    So really they have to take the medicine contained in the small print.

    Daniels and Blank could certainly do a Barclays and put themselves up for election, but no doubt even if HMG abstained they would be re-elected. What would be the point of not doing so, to have another HMG selected team take over instead?

  • Comment number 84.

    Lack of due diligence= losses=incompetence=resignation=without compensation fof loss of office. Says it all!

  • Comment number 85.

    Robert,

    I would be interested to know if any of the bonus payments being reserved for the merged Lloyds TSB/HBOS Bank staff will be going to the junior staff formerly employed within HBOS?

    Clearly HBOS was a sinking ship and although this may be the responsibility of the Captains of that ship, the junior staff of that concern were the crew of a sinking ship and are lucky to be still in employment.

    Were it not for the "SS Lloyds TSB" coming along and plucking the HBOS crew members from the Sea of Despond, the management and crew of the sunken wreck would be all queueing up at the Dole Offices as of now.

    One has to wonder whether it is fair that the tax-payer and share-holders of the 'relatively successful' Lloyds TSB should be seeing some of their investment funding the crew of the "SS Marie HBOS Celeste!" and their no doubt sizeable bonuses which will pay for their next car or tropical holiday away from the trouble and strife being experienced elsewhere in the British Economy!

  • Comment number 86.

    Welcome back Robert!

    Three points:

    1. GB has to give his support to Blank and Daniels as it was with his support and a nod and a wink that the deal with Lloyds and HBOS went through so quickly and so unchallenged; even those shareholders who tried court action to prevent it were tossed aside. GB will probably also give his support for stratospheric bonuses and yet again allow 'reward for failure'.

    2. Blank and Daniels had enjoyed good reputations up to the point, dare I say it 'prudence' when this disastrous deal was struck. However the thought of having a 'mega' bank in their midst for not doing a lot in return proved too strong a temptation. In the end it seems that they too succumbed to greed.

    3. It goes to show that when government gets involved, beware the fall out, because it seems that once again another house of cards has collapsed. I see that Mandy is up to that old ruse again of saying that we should wait for four or five years before criticising or not whether we, the taxpayers will be rewarded or not! He's like an old record.

  • Comment number 87.

    Of course Blank and daniels should stay.

    They have pulled off a huge coup. In a few years they will be running the biggest bank in the Uk with an unrivalled marketshare.

    The cost of this
    An expensive deal with the government - but what was the option - no merger and LoydTtsb would have remained a small and insignificant Bank.

    Robert you talk as though 4/5 years is a lifetime. It is not and indeed it is that approach that has driven the short term culture that you complain about so bitterly.

  • Comment number 88.

    Robert, your article makes some relevant points about the dilemma facing the shareholders of newly merged Lloyds and HBOS banks and the effect this will have on Blanks and Daniels standing with both sets of shareholders.

    On the one hand the HBOS shareholders (the majority) have been positively affected by the merger whereas the Lloyds investors, at this moment in time, have been adversely affected by the merger.

    In spite of all that I believe that both sets of shareholder now need to take a more pragmatic and longer term view of the newly merged bank's potential with regard to their investments. They need to trust that Blanks and Daniels, who have a good track record as prudent bankers, will be able to deliver the banks full potential if they are given enough time. I would suggest that a timescale of three to five years is reasonable. The days of making aquick short term killings are now hopefully behind us.

  • Comment number 89.

    ~57 kafkalives.

    Isn't that where it's all gone wrong?

    Banks in Captain Mainwaring's times were 'simpler' and the bankers were more easily trusted because people could understand them and the business they did.
    They hadn't yet acquired the American influence of ruthless dealing, profits at all costs and market dominance. They had a less aggressive methodology and one that may well have been better suited to the UK and its people's "Britishness".

    But that's why I think there could well be people waiting in the shadows to take over.

    NO, not replacements of the "Sir F brigade" of bankers, but a new generation of bankers that are capable of blending accountability to HMG, to shareholders and to customers and that can achieve that with some degree of morality and responsibility.

    If the Lloyds shareholders / HMG feel that Blank and Daniels do need to go, I think they might actually be able to replace them without too much difficulty.

    I personally, don't think B&D have, as yet, failed in any great way. (But then, I'm not one of their shareholders). I think the agreement to the merger was reasonable in the extreme circumstances involved. But, whether they (and the rest of the Lloyds board) have a realistic chance of making it all come good ...... well, only time will tell that.

    Or perhaps they'll never get the chance to try.

  • Comment number 90.

    This seems a specious post. Surely even the institutions which held shares in both HBOS and LLoyds would have lost less if they had let HBOS go into liquidation / nationalisation. They would only have lost the value of their shareholding in HBOS - that is limited liability - whereas now they have lost virtually all of the value in Lloyds too. the rational course would have been for Lloyds to scavenge the deposits from HBOS after nationalisation / liquidation, as Santander did with B&B. Perhaps none of these insitutions realised even in Jan 09 the true scale of HBOS' problems? - even scarier! Everyone involved in producing this farce should resign or be sacked.

  • Comment number 91.

    These guys should be dismissed with immediate effect. Yes, it was an otherwise well run bank but that will be based on the culture and controls that prevail throughout the organisation. The guys at the top get the risk/reward pay and this looks like it has turned into a bad decision by the board - they have to go! If it had turned out to be a spectacular success they would have had a payout based on that so they have to suffer the downside as well!

    As for new CEO, I'm sure there are a few people out there who have a decent enough CV to steady the ship (and no Mr Goodwin, you may NOT apply...)

  • Comment number 92.

    Strange how so many people now want Blank and Daniels to resign, but several months ago when the debate was ongoing they were all for it.

    At the time I was concerned this deal was being rushed and wanted it properly looked at. Well it's too late now, so let them get on with it and take another look in 3 or 4 years time. It's going to take at least that long before an accurate assessment can be made as to whether it was good or bad. Let them get on with it and stop whining the time to say no was last year.

  • Comment number 93.

    Here's an even more radical thought I suggested a few days ago.

    Suppose Daniels or Blank were to resign on a point of principle at the state getting more than 50%.

    The timing last week would've been ideal, with Sir Fred Goodwin's pension all over the news. Resigning Lloyds chief sets himself up as a sharp contrast to Sir Fred by waiving much (or even all) of his pension rights.

    So now we have Good Banker/Bad Banker all over the news. Good Banker made one terrible mistake, but did the honourable thing and paid the price.

    Now good banker can speak more freely, and is ready to do the media circuit as Popular Hero. Tell the inside story of banking in crisis, and especially that takeover (pure dynamite)! Write a book.

    Possibly even make a whole new career in the media (like, for example, Michael Portillo). But even if not, he could make a fortune just giving a few press interviews, and appearing on the after-dinner circuit.

  • Comment number 94.

    The banks are in trouble, their bosses get paid a lot and they have made a lot of mistakes - its not really new stuff and I know its a blog but why oh why can't we have a constructive blog about how we get out of this mess.

    Is this vision of the future beyond you Robert - or is it that in solving this issue you would end your rather lucrative current career as doom mongerer par excellence?
    (plenty of doom to monger at the moment granted).

  • Comment number 95.

    Are the current shareholders of LLoyds ( I dont mean the small shareholders but rather what journalists call 'investors') the same ones as last month? I seem to recall the a major 'investor' in northern rock was a hedge fund just before it it was nationalised.
    As you write the HBOS commercial loan book has been presumably written DOWN not OFF, and has who knows what the state of Halifax's mortgage book is and how far it is securitised.
    The Government prefers to be involved in decisions on commercial lending at the very high strategic level and most of us would want that too. .. No lame ducks or picking winners. And prices need to fall a little more in the housing market to bring in buyer at any prudential level of loan risk exemplified by what Halifax is offering now.

  • Comment number 96.

    Just how much more damage is there left for Brown to cause. Come on labour you cannot let him continue, it's become totally unacceptable.

  • Comment number 97.

    I feel that HMT twisted Lloyds' arms quite badly to force the bank into APS deal by raising core tier 1 capital requirements.

    The assets by now have depreciated already a lot and they need to depreciate further 25+15.6=40.6bn (16%) more for HMT to start covering Lloyds' losses. I doubt that assets (mostly UK property) would depritiate further 16% or more. If I am right then HMT would not pay anything to cover Lloyds potential losses. Moreover, HMT will get 15.6bn worth of LLOY shares at a cheap price.

    However, Lloyds are now obliged to further increase their lending by 28bn as HMG wishes (in the situation when loan/deposit ratio of the bank is already very high).

    In the place of Daniels and Blank I would resign only if they feel are now puppets for the Government and cannot independently do their work.

    If they feel that they can take the Lloyds share value to at least 300p in the next 3-4 years then they should stay and work hard.

  • Comment number 98.

    There is a great deal of (understandable) criticism of the performance of the PM on this blog.

    What puzzles me about the current political scene is the absolute absence of any criticism emanating from the back benches of the governing party.

    Surely the whips cannot have something on ALL of them. There are over 300 labour MPs - for goodness sake some of them must be honest, decent and upright - musn't they?

    I realise its primarily the job of the opposition to provide the counter arguments but, as they seem unwilling/unableto do so at the moment, where oh where are the dissenting voices within NuLabour.

    They must realise they are heading for political oblivion at the next election.

    Oops! Just answered my own question. They're hanging on to the gravy train until the last possible moment.

  • Comment number 99.

    Just so Eric & Vic don't misunderstand anything.

    When I take over power-
    the minute the dust has settled on the banking front I am going to split up the banks into small pieces (max 7.5% market-share each) so that they can't ever get into this position of a wildebeest herd again.

    And I don't care if they say they need to be big to fund monster projects.

    There is no way they are getting a monopoly of the UK retail banking sector. Dream on Vic, baby..... you just got too greedy, time to go.

    Small is beautiful.

  • Comment number 100.

    Dear Mr Peston

    I am embarrassed to read articles like this. Lloyds showing sympathy yet again for the poor shareholder of a bank. Shareholders in Lloyds enjoyed several rich years of income and capital growth ( remember the announcements of yester year...yet another record profit making ( £x billions) year for the bank thanks largely to the exhorbitant charges they levied on ordinary account and mortgage holders and venal nature of the senior management in their pursuit of the quick buck and the salaries and bonuses that went along with it. Llyods saw a chance to make yet another quick killing by taking over HBOS and looked to the government to waive aside the normal takeover rules. Oh dear that didn't work. If the government now didn't prop them up what would the shares be worth...nothing because it would be another Lehmans....whereas, with a bit of luck, they may still get something out of the situation albeit by having to have to wait.

 

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