Thursday, September 18, 2008

Name of Old Bank Disappears - Or Does it?

In the 17th Century the oldest Bank in what is now the UK, it was also the only surviving commercial enterprise created by the Parliament for the Kingdom of Scots to survive. However, yesterday when HBOS merged with Lloyds-TSB the name of the Bank of Scotland disappeared apart from the notes in your pockets. At least that is what early reports in the national media indicated that the name would be come Lloyds-Halifax, however it appears that only the TSB bit is being lost in what is now becoming Lloyds-HBOS.

One reason for this may be the Bank Notes (Scotland) Act 1846 which means that for a bank to print its own banknotes in Scotland it must maintain a head office north of the border. So HBOS's Scottish HQ on the mound will continue to operate and AGMs will continue to be held.

Meanwhile while insurance company AIG were effectively nationalised in the States the Government now owning 80% investment banks Morgan Stanley and Goldman Sachs are next in the firing line according to experts. However, considering that many of these companies are being bailed out by a country with a national debt of $9.6 trillion one does wonder just what happens should the lender of last resort of mortgage, insurance or banking companies, the US Government, have to file for Bankruptcy at any point.

3 comments:

jamesshaddock said...

Can a government file for bankruptcy?

Stephen Glenn said...

Good question James. It may well depend on when the lenders need to realise their loans in this case after all times are hard.

Wonder if the IMF will be able to bail out the National Reserve should push come to shove though.

Kev said...

Somehow I think the Bank of Scotland name will stay for a while. After HBoS was created, it survived, as did the Halifax Brand.
The head office can stay on the Mound, albeit owned by a holding company called Lloyd's HBoS or something.
I feel a bit sorry for the staff, though. Many regarded share options as part of their remuneration. Some would have bought shares at a discount, having believed it prudent to do so. After having had to come up with further cash for the rights issue, they find their savings somewhat diminished. Not their fault, but caused by recklessness in the banking sector. Shame.

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