Well. Those Lloyds shareholders who were told that buying HBOS was a GREAT idea must be really, really happy.

I'm finally getting out of Halifax for my current account and credit card. Mostly because they still won't reliably do faster payments to other accounts. They won't even do one to their own credit card, managed through the same web interface. On top of that, I had to rush to a branch after work last month because the credit card due date is basically random, and fell on the 3rd - where I was paid on (January) the 28th as usual. A Wednesday. With the old-fashioned 4 working days of them quietly earning interest required for phone or internet payment.

Partly, though, it's because since the Lloyds takeover there's been an increasing amount of harassment on the online banking asking me to upgrade to the £12.50/mo account - an interstitial at login, banner ads, even displacing the "I want to move some money" item in the account actions dropdown menu. It's ridiculous.

So it's great to see that as I vote with my feet and contribute to their eventual burning in hell, the government is kindly balancing yet more of their incompetence on my unwilling head. Brilliant!

Ironically, Lloyds TSB pay customers interest for uncleared credits and move money instantaneously between accounts.

I'd be interested to know who you move to (because given your complaints, Lloyds would be the obvious candidate), I'm not sure whether Nationwide do business accounts, but they certainly seemed to have survived this whole thing with their name intact, along with (bizarrely) Nat West, who continue to run upbeat adverts despite being owned by RBS, and therefore surely owed a repeated kicking.

(Having worked at Lloyds I despise Nat West for their shrill anti-banking adverts which they used to run repeatedly, the shits.)

Re: Lloyds shares - I don't think any shareholders needed convincing to green light the move. Lloyds are very good at integrating banks (comparatively), and the combination of increased market share with decreases in expenses through cuts to back office staff and branches... too good to miss. Especially as we'd been turned down by the competition commission when we tried to buy Abbey, leaving us unable to expand in the UK. By waiving the rules, the govt had basically offered us the moon on a stick, that we now realise the stick doesn't carry the moon but a lollypop with flecks of shit on it... I think we were all too greedy to apply sense tbh.

I'm Ex-Lloyds myself - am I wrong in recalling that Daniels only came aboard from Citibank once the hard work had been done and TSB's retail banking systems had usurped those of the Black Horse due to real-time money shuffling capabilities?

I was ready to agree, but I decided I had to do my homework, results:

Eric Daniels, MSc
Left Citibank in the mid-90s, then after working elsewhere joined Lloyds TSB in 2001 as Executive Director, UK retail banking, moving to Group Chief Executive in 2003.

So... as head of retail banking, possibly oversaw the whole shift.

Personally, I liked E.D. because he changed the bonus structure so that service targets were given more priority, and he gave each branch more responsibility to manage itself and it's budgets. The combination meant that we were encouraged to be a little less cut-throat in our dealings with the public and try to engage more in long term relationships.

Example: if we mis-sold a customer a credit card, on the old system, we would have been credited for the sale and yippie, got a bonus. After the change, if you mis-sold a credit card to a customer, you'd get the sales plus, then a minus for the complaint (service target not met) and a minus for someone closing a credit card account (branch product count falls), then overall you'd be down.

It's odd, Lloyds TSB turned a profit during the crisis, he waived his bonus, he supposedly didn't want to take over HBOS, yet people are calling for his head. As far as I can gather, he's been the only sensible executive out of the big four. But as I said above, I quite liked him, so possibly biased.

I am under the distinct impression that a lot of pressure was put on Lloyds for this takeover to be done in record time. A LOT of pressure, coupled with some nice bullshit to keep them in check.

Not that I am suggesting the government was trying to be seen to be doing something pro-active to avoid a disastrous bank failure, while at the same time having no real plans with what to do three months down the line.

Honest.

In terms of assets, HBOS was the bigger bank, and saddling a smaller bank with that in good times would be the bargain of the century.

And the retail part of HBOS last year made a profit of £1.37billion. Lloyds TSB *as a whole* made a profit of £807million.

Both banks could have been fairly sturdy still if they had been kept separate (though obviously with declining profits compared to previously), and the corporate and retail sections of HBOS split or nationalised.

I think.

Anyway, essentially Lloyds eyes were too big for their stomach, but they weren't given enough time to look before they ate. And now their guts are bursting.

Does this mean that Lloyds will now be more likely to lend money to consumers/smallbiz than other banks?

My (somewhat shaky) understanding of the current situation is that the Government's throwing money at the banks, who are then keeping it as capital to shore up their own financial reputations, rather than lending the stuff out.

The obvious solution to this seems to be for the Government to start up/take over a bank and start lending semidirectly? Is this what's happening now? if so, why did they bother with the quantitative easing measures? What's going on?

*edit* Don't mind me, I've just been out drinking all weekend and haven't been paying attention the the news, so am confused. I've now realised that I should be a bit less lazy and find the answers myself, on this thing called "the internet".

The government wants the banks to lend more to people and to businesses.

They also want them to be more prudent with their lending.

Which they want them to do more of.

To get them to do more, they want them to run like autonomous banks.

But to prop them up, they're increasingly state controlled.

The government keeps putting money in.

And it keeps getting swallowed up.

So they've decided that they're going to ("not, honestly", Government Ed) print more money, which will make it easier to lend, while subsequently devaluing the pound yet further and Christ knows.

That's my understanding.

To put it another way: s'all fucked.

Quantitative easing struck me as a potentially good idea, as nobody's massively concerned about potential inflation at the moment, what with everybody shitting themselves about deflation.

The big problem with QE was that the banks aren't that keen on lending at the moment, as they've all shat themselves. (A theme developing, there). A better solution would be for the Government to do... what they've just done with Lloyds, or something similar to it.

Except they now seem to have done both. Umm.

So, it looks like they didn't have the bottle to do the difficult thing they should have done in the first place, and then they did it anyway. This is what poker players would term "spewy" behaviour.

It might just work, though. Better than doing nothing, I'd say. They're clearly taking risks in order to save their necks before the next election, but - what with everyone shitting themselves - it looks like they're terrified of taking risks properly. So they take a small risk, and everyone says "it's not risky enough", so they respond with "oh, OK, how about this?"

Given the (newfound) tendency of financial markets to massively overreact to risktaking that they don't approve of, I can understand why they've taken this tack. I think.

That's... Accurate. Yes.

It's all cowardice as they don't want to appear 'business unfriendly'. But that only delays the inevitable.