Sunday, 21 September 2008
Lloyds and HBOS
I wonder if the Lloyds-HBOS merger might not be Gordon Brown's legacy - it certainly looks to be the only thing of significance he has done so far as PM. But it won't be a happy one. In effect, he has allowed a private sector monopoly to be created. That's great news for Lloyds shareholders, but bad news for every one else. Brown clearly understand that competition is vital for a free market - so much for the great economist! Naturally, there were plenty of alternatives. The Treasury could have just said it would buy every HBOS share available at £2. That would have burnt the short-sellers and stabalised the share price. Instead, he panicked, and created a mess that will have to be unpicked another day. I don't think the public will buy into his 'I saved the economy routine.' In time, they will just notice that Lloyds-HBOS is acting a predatory monopolist and know who to blame.