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Big bank bosses due to meet King | Big bank bosses due to meet King |
(about 6 hours later) | |
The bosses of major UK banks will be meeting Bank of England governor Mervyn King later on Thursday. | |
They are likely to tell Mr King that he needs to do more to reassure their creditors that the central bank will provide help if it is needed. | They are likely to tell Mr King that he needs to do more to reassure their creditors that the central bank will provide help if it is needed. |
They want Mr King to inject more cash into the money markets in line with central banks elsewhere in the world. | They want Mr King to inject more cash into the money markets in line with central banks elsewhere in the world. |
It comes the day after the Bank of England had to reassure investors that rumours about some banks were untrue. | It comes the day after the Bank of England had to reassure investors that rumours about some banks were untrue. |
'Not tolerate' | |
The UK's financial watchdog, the Financial Services Authority (FSA), is investigating whether rumours have been deliberately spread to undermine the value of bank shares. | |
There has been a series of completely unfounded rumours about UK financial institutions in the London market over the last few days, sometimes accompanied by short-selling UK Financial Services Authority Read Robert Peston's blog | There has been a series of completely unfounded rumours about UK financial institutions in the London market over the last few days, sometimes accompanied by short-selling UK Financial Services Authority Read Robert Peston's blog |
It said it would "not tolerate" traders starting "false" rumours about firms to make cash from dealing in their shares. | It said it would "not tolerate" traders starting "false" rumours about firms to make cash from dealing in their shares. |
HBOS, whose shares fell as much as 17% at one stage on Wednesday, denied rumours of funding difficulties. | HBOS, whose shares fell as much as 17% at one stage on Wednesday, denied rumours of funding difficulties. |
And the Bank of England also denied that any UK banks were in trouble. | |
'They are lies' | 'They are lies' |
An HBOS spokesman said: "There has been a series of rumours in the market today [Wednesday]. A number of ill-founded and malicious rumours about the UK banking system in the markets. | |
"These rumours have not a shred of substance whatsoever. They are lies." | "These rumours have not a shred of substance whatsoever. They are lies." |
And HBOS supported the "decisive action" of the FSA to investigate the alleged market abuse. | |
"There has been a series of completely unfounded rumours about UK financial institutions in the London market over the last few days, sometimes accompanied by short-selling," the FSA said in a statement. | "There has been a series of completely unfounded rumours about UK financial institutions in the London market over the last few days, sometimes accompanied by short-selling," the FSA said in a statement. |