A major news item this morning is that two British banking institutions will merge to form a huge retail bank. Lloyds-TSB is buying HBOS and will thus end up with 30% of the UK domestic mortgage market. This should be no surprise.
The bosses of the two companies had met to discuss doing this deal a few months previously but had been inhibited by the inevitable involvement of the competition commission. They recognised that current legislation would consider that such a large, dominant player in the mortgage market would not be in the public interest.
As chance would have it, the Prime Minister and the head of Lloyds-TSB (Sir Victor Blank) were at the same party on Monday the 15th and Mr Brown was able to let Sir Victor know that a small matter like Competition Legislation would not be allowed to stand in their way! They could go ahead as planned.
That's lucky. I am sure that the executives of the two companies did their best to thwart the present situation which so neatly enables them to do that which they wanted to do all along, only at a much lower price.
Posted by Nicholas Moore 12:52:03 am