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HBOS brought to its knees by hedge funds hunting in a pack – Cable

September 17, 2008 11:20 AM
Originally published by UK Liberal Democrats

Vince Cable on the HBOS-Lloyds TSB merger talks and the rise in unemployment announced today

Commenting on the news that HBOS are in advanced merger talks with Lloyds TSB, Liberal Democrat Shadow Chancellor, Vince Cable said:

"It is shocking to see a major British bank brought to its knees by an attack by hedge fund speculators engaged in 'short selling'.

"They were only able to speculate because they knew HBOS had a government guarantee and would be bailed out by the taxpayer. If Lloyds hadn't stepped in, the Government would have had to take over.

"Who is next? It looks as if they may now be turning their attention to other banks.

"The Government must make sure that the FSA gets its act together.

"The FSA must insist that the hedge funds declare their position. It must also outlaw collusion between the hedge funds because they are now hunting in packs.

"These 'masters of the universe' must be tamed in the interests of the ordinary families whose jobs and livelihoods are being put at risk.

"The Tories won't say anything about the current crisis as they are completely in the pockets of the hedge funds."

Commenting on the rise in unemployment announced today, Vince Cable said:

"The latest very worrying increase in unemployment figures shows that the financial crisis is now hitting the real economy and real people.

"The really scary figures for job losses in the City now coming through will make the position much worse.

"There is now a real danger that many of the people losing their jobs will not be able to keep their mortgage payments going because they can't get government benefits and aren't insured.

"The Government must step in now to stop the unemployed of today becoming the homeless of tomorrow by stemming the repossessions process in its tracks."