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Did the government abuse its power in the banking sector?

While the banking sector has certainly fought back against the UK government and the various demands which have been made over the last eight months, some still believe this is payback time for the UK government, which is believed to have forced through the Lloyds bank and HBOS merger. Even though there is no hard evidence to suggest this is the case it is rumoured that Gordon Brown himself became involved in the talks and ultimately may have been behind the merger of the two entities.

There is a feeling that the UK government overstepped the mark, disbanding various competition issues and effectively rushing through due diligence, to encourage a public company to takeover a company which was literally on its knees at the time. Despite all of the political debate regarding the state of HBOS before the merger, there is no doubt that the operation could not have gone on as it was. Did the UK government abuse its power over the banking system, at a critical time, or did Lloyds bank grab the opportunity to acquire a major competitor at a knockdown price?

Whatever the situation, there is no doubt that the merger of Lloyds bank and HBOS, at least so far, has been one of the worst corporate mergers in living history.

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