Rulebook tossed aside as banks face the unknown

[Legal Beagles]

A year ago it would have been unthinkable that HBOS would need to be taken over by Lloyds TSB. And - perhaps more significantly - that it would ever be allowed to do so.

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[enaid]

Re: Rulebook tossed aside as banks face the unknown

Details of Lloyds TSB's dramatic rescue of ailing mortgage giant Halifax Bank of Scotland are expected to be revealed.

The BBC and Sky News said a takeover deal had been agreed, though the parties themselves and financial authorities would not comment.
The BBC said both firms' boards had agreed to a deal, at a price of 232p per HBOS share, following talks.
The deal was to be formally announced later this morning, it said.
Earlier HBOS, whose share price plunged by as much as 70% this week amid funding worries, confirmed it was in "advanced talks" over a merger that would create a £30 billion banking giant with nearly a third of the UK mortgage market.
It is thought the Government may waive competition rules to get the transaction through, and reportedly follows talks between Lloyds TSB chairman Sir Victor Blank and Prime Minister Gordon Brown. The Treasury and the Financial Services Authority (FSA) have also been involved.
Spokesmen for Lloyds, HBOS, the Treasury and the FSA declined to comment on the reports.
A takeover would end uncertainty about the health of HBOS, but there were immediate fears about the implications for the 135,000 UK staff employed by both firms - 65,000 by HBOS and the remainder at Lloyds TSB.
Alex Salmond, the First Minister of Scotland - where about 17,000 HBOS jobs are based - attacked the "spivs and speculators" he blamed for targeting the Scottish-based bank. He said any merger between the two should be based on measured discussion, not a "shotgun marriage" driven by speculation.
The potential merger is the latest dramatic episode this week which has already seen the collapse of 158-year-old investment bank Lehman Brothers and the £47.2bn bail-out of US insurance giant AIG