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Monday, 20 September 2010

Daniels out of the lions' den

Lloyds' have announced that Eric Daniels is going to retire. Apparently its is a "shock", implying that it was his decision, made without consultation. If I had been chief executive of Lloyds and an American like Mr Daniels, I would have told his chairman, shareholders and the British media where to go a long time ago.

Mr Daniels will retire next year according to a statement from the bank, but the media have already started spinning the story. According to the Telegraph, "His tenure at Lloyds has been controversial, particularly his decision to pursue the takeover of rival lender HBOS in the midst of the financial crisis in 2008, which led to the bank requiring a multi-billion pound state-funded bailout."

Now lets get this straight. Lloyds was always a conservative bank, but their chairman, Victor Blank, a Lavour Party contributor, got into a chat with Gordon Brown at a cocktail party and agreed to look at the bank for the good of the country. Nothing like the national good to persuade you to sell your shareholders down the swannee.

Daniels and his team were then given assurances by the FSA that the HBOS loan book was fairly stated (which it wasn't) and the deal went ahead. Daniels later told a parliamentary committee that the bank's board had not had sufficient time to conduct proper due diligence on HBOS's books before it agreed to the merger, but then what is the point of a due diligence exercise if your regulator is telling you the bank is clean and the Prime Minister is pushing your chairman to buy the bank?

I would have turned round and told anyone who was listening, "Your bank, your mess, your country, I'm off home".

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