Michael Geoghegan has sprung to the defence of HSBC suggesting that the company’s more conservative lending policies over the years have now proved to be perfect with HSBC relatively untouched in balance sheet terms from the ongoing worldwide slowdown. He also suggested that the UK government's £37 billion bailout package will encourage banks to return to more risky lending operations in due course as they now have the added backup of government assistance.

For many years HSBC was seen as one of the most "boring" in the sector but many investors do not mind boring investments in the current market conditions. High-growth banks such as the Royal Bank of Scotland and HBOS have really suffered over the last 12 months and many believe they are paying the price for above average risk taking over the last few years.

This is the first time that HSBC has commented upon the bailout, in which they were not involved, suggesting that rival banks have now been refloated and market conditions and competition do not reflect the underlying strength of the banks in question. Even though HSBC yesterday announced a number of substantial write-downs these were very much in relation to the worldwide economic slowdown as opposed to the credit crunch.

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