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Bank bailout criticised

The chief executive of HSBC has criticised the government's bank bailout, claiming that it may encourage future reckless behaviour.Michael Geoghegan said that his bank had been run using conservative policies which allowed it to stay afloat during the financial crisis.He told the Guardian that banks and others in the City had been punished by the markets for their errors but they might not learn from them, due to the government bailout."I hope these guarantees are not in place for too long. They may create the wrong type of behaviour by managements in those banks," he said.The banks which benefited from the government rescue package were RBS, HBOS and Lloyds TSB, which are now part-nationalised thanks to the government move.Last week, the Treasury announced a new company, labelled UK Financial Investments Limited (UKFI) which will be wholly owned by the government and will manage its share in the banks.According to the Treasury, "its overarching objectives will be to protect and create value for the taxpayer as shareholder, with due regard to financial stability and acting in a way that promotes competition".

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