'Financial storm' hitting banking

Another week brings another development in the crisis hitting the UK banking sector.

But, as news emerged that troubled bank Bradford & Bingley is to be nationalised, HBOS has been painting a positive picture of its impending £12bn takeover by Lloyds TSB.

HBOS communications manager Shane O'Riordain told BBC Scotland that the bank was most definitely not in crisis - simply that its falling share price should not have been allowed to be used as an indicator of its financial health, which was otherwise strong.

Speaking to BBC Scotland's Politics Show, he urged the public not to judge HBOS by the headlines of the last week, but where things would be in a few years' time.

"We believe this will be a very strong franchise and therefore good for Scotland," said Mr O'Riordain.

Meanwhile, the Scottish Government's work to ensure the best possible outcome for Scotland from the takeover has continued apace - though this was the week some of the sheen came off its campaign.

Scotland's opposition parties - Labour, the Tories and Liberal Democrats, cast doubt on First Minister Alex Salmond's attack on the "spivs and speculators" who he said were responsible for the downfall of HBOS as a company in its own right.

In defence, the first minister pointed out that action had been taken to clamp down on short selling.

Mr O'Riordain declined to comment on that issue, but did partly address Mr Salmond's earlier criticism that financial regulators should have acted earlier to forestall the speculative attack on HBOS.

"There is literally a financial hurricane roaring through the banking sector - both in this country and in the United States," said the HBOS chief.

"We've seen unprecedented developments in the last few weeks. In our judgement, the regulators have acted decisively right through that period."

Mr O'Riordain also registered a vote of thanks to the Holyrood government and all its political parties for the work they had done on the HBOS issue.

That will continue during the week, with a meeting of Mr Salmond's council of economic advisers to build the case for Scotland to retain headquarter functions and jobs at the Bank of Scotland.

Source: BBC News