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.
