Peston is reporting that there is trouble at Mill re the HBOS merger. Many HBOS ex-employees with shareholdings are aghast at the terms of the Lloyds deal. Sir Peter Burt,left, has form for this too. Earlier this year he was saying we should suspend accounting standards to help his old bank.
Well, good luck to them. Brown backed LLoyds to merge with them and the Government, slowly getting back some form of grip on events, is not going to get taken down on this. HBOS was in a terrible financial position and would not exist as an organisation today were it not for taxpayer support. The same cannot be said of Lloyds.
For all this though, the banks are still a huge cause of pain in the economy. Not lending money as they should, recalling loans and raising rates where they can on customers.
The policy of reviewing their books by the treasury and ordering them to take taxypayer support has still not worked. Libor is going down but is still high. The market are still prone to huge falls on any given day on the slightest bad news (and bounces too, as in all bear markets).
So, the Treasury plan is not working, interest rate drops look desperate. The Government, BOE and Treasury (..and FSA?) are still all flailing; and now they have hung out their credibility.
Expect more bad news until a more coherent plan is put together. The traditional muddling through has only stopped us being engulfed in the quick-sand, we are not free yet.
PS still on hols, back at the end of next week.