MP criticises 'secret HBOS loans'
Updated on 25 November 2009
Lloyds staff and shareholders were "mugged" by the decision to conceal £25.4 billion in Bank of England loans to HBOS last autumn, an MP said.
MPs slammed the decision not to disclose the emergency funding until Tuesday, November 24, and for keeping Lloyds investors in the dark over the extent of the troubles at HBOS.
In an emergency statement to the Commons, Alistair Darling said if the loan had been made public it could have "seriously jeopardised" the stability of the entire UK financial system.
He added that the loan had been repaid in full by early January, ahead of completion of the deal.
But MPs said investors should have been informed of the loan when the banks were putting forward their case for the merger.
"Lloyds workers and shareholders were mugged," said MP Jim Cousins.
More than 10,000 jobs have been cut at Lloyds Banking Group since its merger with HBOS as the deal left it saddled with billions of pounds of bad debts and toxic loans.
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