British government criticized over handling of Lloyds bank

British Prime Minister Gordon Brown’s government came under growing criticism yesterday for its handling of the financial crisis as fears mounted that Lloyds Banking Group might be nationalized because of a takeover the government urged it to make.

British Prime Minister Gordon Brown’s government came under growing criticism yesterday for its handling of the financial crisis as fears mounted that Lloyds Banking Group might be nationalized because of a takeover the government urged it to make.

News of a £10-billion ($17.75 billion) black hole at the HBOS subsidiary shocked the markets on Friday, just weeks after the government bypassed competition laws to allow a rescue takeover of the stricken bank by Lloyds. Lloyds shares plunged 32 per cent after the announcement Friday.

Taxpayers have pumped £17 billion ($30 billion) into the combined group, leaving the state holding a 43.5 per cent stake in Britain’s third-largest bank.

Attention is now focused on why the government permitted the deal, announced last fall.

 
 
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