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Call for legal inquiry into banks Call for legal inquiry into banks
(10 minutes later)
The Scottish businessman who led a bid for HBOS before it was merged with Lloyds TSB has called for a legal inquiry into the banking system.The Scottish businessman who led a bid for HBOS before it was merged with Lloyds TSB has called for a legal inquiry into the banking system.
Jim Spowart said recent events raised serious questions about the banking sector, particularly in Scotland.Jim Spowart said recent events raised serious questions about the banking sector, particularly in Scotland.
It comes after the chancellor moved to dampen speculation that the Lloyds Banking Group could be nationalised.It comes after the chancellor moved to dampen speculation that the Lloyds Banking Group could be nationalised.
The organisation has said that it expects its subsidiary to make record losses of nearly £11bn.The organisation has said that it expects its subsidiary to make record losses of nearly £11bn.
Shares in Lloyds Banking Group, which is 43% owned by the taxpayer, closed down 32.5% at the of last week.Shares in Lloyds Banking Group, which is 43% owned by the taxpayer, closed down 32.5% at the of last week.
I do think we really need now, given all the revelations of last week, to call for something like a judicial inquiry into what's actually going on Jim SpowartBusinessman On Friday, Chancellor Alistair Darling told the BBC's Newsnight that allowing HBOS to collapse would have had knock-on effects for all of Britain's banks. I do think we really need now, given all the revelations of last week, to call for something like a judicial inquiry into what's actually going on Jim SpowartBusinessman Chancellor Alistair Darling said that allowing HBOS to collapse would have had knock-on effects for all of Britain's banks.
The chancellor refused to rule out nationalisation of Lloyds but insisted a range of options remained open to help the banking sector.The chancellor refused to rule out nationalisation of Lloyds but insisted a range of options remained open to help the banking sector.
He later moved to stress that "properly regulated and supervised" banks were best run on a commercial basis.He later moved to stress that "properly regulated and supervised" banks were best run on a commercial basis.
Mr Spowart, who set up HBOS's Intelligent Finance online division, told BBC Scotland's Politics Show shareholders should still be worried about nationalisation.Mr Spowart, who set up HBOS's Intelligent Finance online division, told BBC Scotland's Politics Show shareholders should still be worried about nationalisation.
Bu he said: "If I was a shareholder I would be shocked by the news coming out in the last few days that that [nationalisation] is now a possibility and very much on the cards. But he said: "If I was a shareholder I would be shocked by the news coming out in the last few days that [nationalisation] is now a possibility and very much on the cards.
"I do think we really need now, given all the revelations of last week, to call for something like a judicial inquiry into what's actually going on with our banks, particularly in Scotland.""I do think we really need now, given all the revelations of last week, to call for something like a judicial inquiry into what's actually going on with our banks, particularly in Scotland."
Mr Spowart said he wanted to see a "forensic examination" of how HBOS was managed.Mr Spowart said he wanted to see a "forensic examination" of how HBOS was managed.
Alistair Darling comments on the HBOS lossesAlistair Darling comments on the HBOS losses
Independent MSP Margo Macdonald has also said she fears the superbank created by the Lloyds TSB/HBoS merger is too big.Independent MSP Margo Macdonald has also said she fears the superbank created by the Lloyds TSB/HBoS merger is too big.
Sir Peter Burt was chief executive of the Bank of Scotland when it merged with the Halifax and launched a bid to prevent the Lloyds merger.Sir Peter Burt was chief executive of the Bank of Scotland when it merged with the Halifax and launched a bid to prevent the Lloyds merger.
He told BBC Radio Scotland's The Business programme that while he was not surprised by the projected losses, nationalisation was not a serious prospect.He told BBC Radio Scotland's The Business programme that while he was not surprised by the projected losses, nationalisation was not a serious prospect.
He said: "I think it was a very good acquisition, there will be some bumps in the road but it put Lloyds in a very strong position."He said: "I think it was a very good acquisition, there will be some bumps in the road but it put Lloyds in a very strong position."
Sir Peter also rejected the concept of a judicial inquiry into the running of HBOS.Sir Peter also rejected the concept of a judicial inquiry into the running of HBOS.
Meanwhile, shadow business secretary Kenneth Clarke branded the merger a "disaster", especially for Lloyds TSB, and accused ministers of overseeing a "shotgun marriage" of the two banks.Meanwhile, shadow business secretary Kenneth Clarke branded the merger a "disaster", especially for Lloyds TSB, and accused ministers of overseeing a "shotgun marriage" of the two banks.
"They should never have been allowed to merge," he added."They should never have been allowed to merge," he added.
"Lloyds TSB was a boring bank, it was a steady bank, it hadn't done silly things.""Lloyds TSB was a boring bank, it was a steady bank, it hadn't done silly things."
Liberal Democrat treasury spokesman Vince Cable said it looked like he was concerned how the banks were drifting towards a situation where nationalisation could be inevitable.Liberal Democrat treasury spokesman Vince Cable said it looked like he was concerned how the banks were drifting towards a situation where nationalisation could be inevitable.
Lloyds chief executive Eric Daniels insisted the company's longer-term prospects were brighter.Lloyds chief executive Eric Daniels insisted the company's longer-term prospects were brighter.
"Lloyds Banking Group has the largest UK financial services franchise, with excellent long-term earnings potential," he added."Lloyds Banking Group has the largest UK financial services franchise, with excellent long-term earnings potential," he added.