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Big bank bosses due to meet King Big bank bosses due to meet King
(10 minutes later)
The bosses of major UK banks will be meeting Bank of England governor Mervyn King later on Thursday.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. It comes a day after the Financial Services Authority launched an inquiry into whether false rumours were spread in the City to undermine bank shares.
It comes the day after the Bank of England had to reassure investors that rumours about some banks were untrue. The Bank of England reassured investors that the rumours were untrue.
'Not tolerate''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. The UK's financial watchdog, the Financial Services Authority (FSA), said it would "not tolerate" traders starting "false" rumours about firms to make cash from dealing in their 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 blogThere 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.
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. "There has been a series of rumours in the market today [Wednesday]," said a HBOS spokesman.
'They are lies' "A number of ill-founded and malicious rumours about the UK banking system in the markets.
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. 'Unfounded rumours'
HBOS said it 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.
In short-selling a trader borrows shares, sells them immediately and hopes to repurchase the shares in the future at a lower price.
The trader can then return them to the lender and make a profit on the difference.