There are more pressing financial concerns than this

John Moss

Labour arm-wrestled Lloyds into buying HBOS and when they saw what a mess HBOS were in, they bailed them out to make sure the sale went through.

Pension funds and private investors have lost billions, all to save Brown's face.

I'm with Fallon, this is a scandal!

Frank

Slightly off topic, but RBS is touting for deposits on German televison as a reliable bank with roots going back to 16 something, no mention of the mess it got itself in.

adrian drummond

I remember someone saying in 2007 that things could only get better.

Dennis Churchill

It’s almost as if we were ruled by former Student Activists with virtually no experience outside politics.

Chris W

Can anyone explain how these banks managed to repay these debts within a year, when the taxpayer is still lending them money? Is it th case that the loans were repaid with our own printed money? Did Brown have to ring Mugabe for advice, or was it offered gtais?

William Cheshire

'If the situation had been exacerbated by full disclosure of the mess RBS and Lloyds were in then God alone knows what pandemonium would have ensued' - NOT Lloyds but HBoS. Speaking as a Lloyds shareholder, I think it seems that I was deceived by the Government, if HBoS was in this deep a hole.

JONNY

The ineffable conceit and fulsome arrogance of this Great Lord Mynors (as just viewed on 4) is really quite breathtaking.
He's such a very superior person sitting on his big fat pension. No doubt, almost as risibly overblown as the one he helped secure for his old mate Fred the Shred.

But it's no concern of ours. Not in front of the children and we wouldn't understand it anyway.
And as for the Lloyds shareholders - I'm alright because you see I haven't got any. Wouldn't have touched the shares with a bargepole.
I'm not Lord Mynors for nothing.

Andy Leeds

Correct William. You were conned by the Directors of Lloyds Bank - who are there at your behest - and by the Government. There is plainly a case to be answered by the Directors. HBOS should be demerged from Lloyds.

Nicholas

Will any scandal involving this government ever become a terminally damaging one? So far they seem to ride every storm, regardless of the seriousness of each revelation. Their inherent dishonesty and deceit has been confirmed a dozen times yet still they roll on regardless.

GDS

I'm not a financier but I understand it's a legal resposibility of all company directors to maximise shareholder value. Having been lied to by the government, surely Lloyds and RBS shareholders can clain their shareholder value was undermined by GB?

Duyfken

Lloyds' "purchase of HBOS ... was effectively made blind" and it seems a clear case of material non-disclosure. Shareholders (and I am one) should expect compensation from Lloyds' directors, the government and BofE. Fat chance of course, but perhaps we can rub Brown's nose in this pile of manure.

TrevorsDen

Fallon is correct. The bail out and the secrecy may have been justified (may). That is not (NOT) the point. Brown KNEW the dire state of HBOS when he pushed Lloyds into buying it. He knew it was surviving on govt support. Lloyds shareholders did not.
Amazingly he and the govt simply sat back and watched Lloyds shareholders buy a pig in a poke.

Where did Brown get his training in' transpaaarrency' -- At UEA Hadley CRU ?

I think that impoverished Lloyds shareholders should sue the government.

And indeed impoverished taxpayers already suffering from needless carbon taxes should sue Hadley CRU.
Err... anyone know how to go about that?

Holly ......

John McFall.
Well what can one say???
The very guy who told us with a straight face,"If the Conservatives had been in charge....the economy would be in a serious mess". I awarded Boulton full marks for NOT laughing in camera shot. I also asked if Boulton would be in the spare room or the sofa, for laughing....I HEARD HIM!!!!
We were laughing together...at the same time...at the same stupid comment....made by the same, equally STUPID, STUPID bloke.

General Zod

The Lloyds and HBOS circulars clearly breached the Financial Services and Markets Act in that they didn't give adequate disclosure (hiding the emergency loans). Not only that, but the banks and the government (including through its agencies) committed market abuse.

The shareholders have several possible rights of action.

Snowman

and you would have done exactly what? Let HBOS go belly up? Not only would it have been by far costlier for everyone involved, it would have almost certainly brought the whole financial set-up down, not only here, everywhere. I cannot be bothered to check, but it wouldn’t shock me if the HBOS assets were not far from the UK’s annual GDP.

This is not to say that I don’t share the anger at what happened, but since banking cannot be kept alive without confidence, what the BoE did was the only possible move in the circumstances.

TrevorsDen

Snowman- giving loans or guarantees to HBOS may have been justified. Keeping them secret may have been justified. But Brown encouraging Lloyds to take them over was absolutely not justified in those circumstances.

Of course Brown's excuse may be he did not know about the loans, but that just shoots him in the other foot.

Michael de Anjou

The Government and the Bank are above the law; that is the nature of lenders of last resort; however the directors of Lloyds, if they withheld material information are guilty, under the law, and have no such protections. The FSA are bound to do their duty under their own rules. If they fail to do so then the FSA's fate - abolition- is due and necessary.

TGF UKIP

Now 10.15 pm and not a word on the CH of the puncturing of the "climate change" scam, not even a mention of Monbigot's embarrassment and, most astoundingly, his apology.

Not a word of the transatlantic conspiracy to destroy e mails and withold FOI requests for taxpayer funded data. Not a word of the US Competitive Enterprise Institute now suing NASA and its Goddard Institute of Space Studies for witholding FOI data and correspondence for over three years.

When this story broke I confidently assumed that Never Neather Nelson would use it to attempt to restore some battered credibility for himself and his organ by going to town on the whole issue of the huge scam being perpetrated on the western populations and the democratic deficit in the UK when all the London main parties line up together in their mass attempt at deception. Clearly, I was wrong. The Speccie is no better than the BBC.

Plainly the Mekon has transmitted the message that any such postings by either the editor or his teenage scribblers would be entirely unsuitable material for the house magazine, so sure enough not a word appears. The Mekon Rules OK!

Meanwhile I, at least, can look forward to Swampy Dave continuing to pose and posture in his desperate attempt to flatter LibDem voters and Guardian readers while good solid conservative voters leech away to a sensible party that gives the headbangers the dismissive two fingers they deserve.

Meanwhile, CHers wanting to follow the stripping bare of the "warmist" conspiracy should go to wattsupwiththat.com. Given that one green headbanger friend of mine calls it "the deniers' site" could I give it a higher recommendation?

Alexandrovich

Nicholas; "Will any scandal involving this government ever become a terminally damaging one?"
Nope, they're Teflon. Or so the opposition seem to think. I've had enough of Cameron keeping his powder dry - I don't believe he has any. Time after time after time he should have put the boot in and then administered a lethal injection but, being inveigled as the rest of them he's hamstrung.

Snowman

TrevorsDen @ 10.10:

The puzzling thing is why it has taken a year to reach the public the way it did. Those who wanted to know could have found out earlier. The BoE publishes monthly its own balance sheet plus other info on the flow of funds. These loans would have shown up there, not individually though. Brown must have known about the loans, not because he’s told about every last resort lending by the BoE, but because of their size.

If Duyfken @ 8.35 didn’t know than others probably didn’t know either. The merger going through without all shareholders having access to all relevant info may be the stickiest point of it all.

Hysteria

TGF - yup - we are all being shafted by the establishment - again.

WUWT has some excellent posts by people who clearly have knowledge of what the speak in terms of the code released.

The Spectator CH has lost a lot of credibility over the last few weeks.

TomTom

From David Blackburn's article we learn that The City is not only self-serving and corrupt, but it is unbelievably stupid. Private Shareholders rejected Lloyds suicide bid for HBOS but Institutions voted 96% in favour.

So the fund managers voted to destroy Shareholder Value, increase pension fund deficits, and to destabilise the 6th safest bank in the world.

This is an indictment of London as a financial centre. It means noone can trust any pension fund manager or share prospectus. Not only did HBOS give deceitful information to shareholders subscribing to the rights issue; but Lloyds deceived its own shareholders.

When Eric Daniels joined Lloyds Bank he was granted 1 million Shares for a nominal £1.00 so his losses are minimal. Further the Board is rolling over its bonuses until 2012 so they are taking bonuses for wiping out shareholders.

The EU Commission may bring The City under Franco-German style regulation, but the way it has played fast and loose with millions of people buying private pensions or saving for retirement or house purchase - Equitable Life being the forerunner of this scandalous corruption - so it may be that Casino Capitalism should be eliminated.

This scandal is symptomatic and will be paralleled by these self-same banks and their profits from PFI deals sited in offshore tax havens. The Taxpayer pumps secret loans into banks like HBOS which coincidentally have huge portfolios of PFI schools and hospitals receiving lease payments from the taxpayer.

RBS and HBOS even sold on their train leasing businesses to foreign banks as they were being rescued.

What this shows is that entrusting savings to institutions in The City is as dodgy as an Icelandic bank and the public should note international surveys now rating The City alongside Nigeria and Ukraine for financial stability.

They have played fast and loose with the savings of ordinary people once too often; this denouement is coming in slow motion but banks will be utilities in the future just as mobile phone companies are shadows of their 1990s business model and have seen the vaunted 3-G hype turn to dust.

So David Blackburn is once again wrong. This issue goes to the heart of whether people can save or should save, or simply spend and let the State provide. The middle class have been scr*wed by The City in cahoots with The Government. A price will be paid.....

Cuffleyburgers

I am revealing my simplicity here I suppose but it does seem to me that there has been considerable malfeasance in the whole HBOS/Lloyds tie up, most specifically in terms of disclosure and due diligence.

There simply has to be a legal recourse either for Lloyds' shareholders or taxpayers or both.

As Tom Tom points out the reputation of the city starts to look a bit shabby and to me it is beyond belief that such a ropy deal shouldn't lead to legal action.

SUSAN HILL

What TGFUKIP said. Every single word of it. The scandal of the UEA cover-up is a major one which has been virtually ignored by the MSM, though it is all over the blogosphere. The Spectator and CH ought to have made it their biggest story for years.. they are part of the MSM and people would have taken note if it had been reported in full and correctly. BUt what do we get ? I would tackle it on my blog but it is in general way beyond my sphere of expertise and I am not an investigative reporter. This needs the Home Team. Fraser ?

anne allan

Dennis Churchill - you have hit the nail on the head.
These twerps were spouting the same nonsense 40 years ago and they have learnt nothing since. Remember, Jack Straw was president of the NUS.
For twelve years this country has been mismanaged by a bunch of aging adolescents.

Percy

Having heard the oily Myners on R4 this morning he certainly gives Lord Peter a run in the gruesome stakes.

Gary Williams

Snowman:

In 2008, HBOS's assets were about 45% of UK GDP (680b v 1.5t).

michael

This is an absolutely IMMENSE financial act of sculduggery
Its implications for 2012 are HUGE...

IT MEANS THAT THE ADDITIONAL 7% WORTH OF TAXES ON INCOME, IN COMPULSARY PENSION SCHEMES FOR ALL, CAN BE MANIPULATED AT WILL, PRIVATE OR PUBLIC.

Ken

@TGFUKIP re Climate scammers.

Bravo, right on the button. Hopefully more scribblers than Monbiot will start to play catchup soon.

Meanwhile some of bloggers are providing in-depth insight into a certain "Read me" text file apparently full of very dodgy "scientific method".

What is more scandalous is that the taxpayer-funded research at the University involved and collaborators at the equally taxpayer-funded Met Office appear to be the PRIMARY source for every other climate change dogmatist on the planet.

So is the world economy being disgracefully, if unwittingly, distorted/destroyed by British taxpayers?

How very Brownian.

oldtimer

"There are more pressing financial concerns than this" is your shocking headline.

It is shocking because it ignores the paramount importance of trust and integrity when companies seek new capital from the market.

It is one thing for the BoE to provide lender of last resort funds to banks that need them. It is quite another when the Prime Minister of the day encourages a takeover of a bust business, suspends competition rules to grease the deal, allows the BofE to provide lender of last resort support, and then looks the other way when a leading bank raises new equity without disclosing the fact of the BofE support.

If this were the USA, I would expect the class actions to be on the march already. No doubt the words of the Lloyds chairman (Victor Blank) and in the Lloyds prospectus to be under the closest of scrutiny.

It always seemed to me that this takeover was a dumb deal - said so here at the time. Now we can see that it was both dumb and shocking.

michael

If we are not careful, and banks are leaned on
hard enough, their 2012 pensions windfall could well end up as the mother of all stealth taxes. It depends upon how much fund managers are bonused into purchasing various DEBT portfolios.
The Olympics will be a golden opportunity for stealth.

Yarnesfromhorsham

Two Scottish politicians helping two Scottish Banks in trouble. Some things never change.

TGF UKIP

Susan Hill. you, I, all of us are banging our head agasinst the brick wall on this one.

I have been on at Never Neather for months on this. He frequently describes himself as a sceptic and the house mag does publish pieces like James Delingpoles on the scientific row, but he will not go near the politics and more particularly the massive democratic deficit as all his London political pals bludgeon through their warmist legislation which is going to add zillions to business and family overheads.

Why is this? Because he is forbidden by either his Managing Board at CCHQ or by his master and mentor who is afraid that by The Speccie seriously getting stuck into the scam being perpetrated on us all, it might seriously jeopardize his chance under Dave of becoming Press Baron Neil.

Snowman

Garry Williams @10.05:

thanks, next time before opening my big mouth I’ll check first. Even so, the assets were pretty massive considering that not that long before 2008 the BoS was a sleepy, regional player in a land of 5mn people.

Ken @ 11.26:

if you truly believe that the officially endorsed AGW doctrine will get even tweaked you’re going to be mightily disappointed. Monbiot repentance amounts to little, prof. Jones & co. will get more funds and continue to scare us with the pap of ‘you going to fry soon’, and the Governments everywhere will happily levy green taxes to pay for whatever they fancy, but mostly pet projects.

Snowman

TomTom @ 4.24:

right on the sentiment, but can we do without the banks in real life? I dunno. We need credit, it’s what fuels the modern life, and there’s nothing fundamentally wrong with the credit model provided that the rules are clear, and those banks or other financial institutions that break them are stopped in time.

The bubble that nearly destroyed us all arose from a massive appreciation of an important asset class - the housing stock. To stop the insanity after it got going was beyond the power of everyone. Neither the BoE, nor the Treasury, and certainly not the toothless FSA could have put a stop to it when it was in full swing. Can you imagine the reaction if Mervyn King were to hike the cost of money to a level that would have stopped the spectacular rises in house prices? Those who re-mortgaged every nine months or took loans against the swelling asset would have been rioting, the banks would have cried loud that the future of the City’s under threat, and the Treasury, deprived of juicy tax receipts to plough into the NHS and elsewhere would have made sure that King got dismissed without a pension, and the policy reversed.

To blame the banks for facilitating the unchecked credit creation with clever financial instruments, and rewarding themselves more than handsomely in the process feels good and morally comforting. It doesn’t address the root of what went wrong. You may object to my saying it, but we were all, directly or indirectly, benefitting from the insanity, we didn’t shout ‘let’s stop it’, and hence we all should pay our share of the fallout. As often happens, those who are the least to blame get hit hardest.