I don’t profess to know much about financial markets in the slightest, however I am ever-so-slightly concerned about the announcement of a possible takeover of troubled bank HBOS by Lloyds TSB.

Although Lloyds TSB is being hailed as the saviour of the UK’s biggest mortgage lender, the £trillion merger is essentially a Gordon Brown endorsed anti-competitive venture. Surely this will have more profound effects on UK banking for years to come - the mega-bank would dominate personal banking.

How regulated this merger would be by the FSA is anyone’s guess, but with the government pushing for the merger, something tells me this case will have many ’special considerations’ attached.

How the other banks react if the merger happens will be interesting - in the short term this action may help stabilise the Financial Services industry, but it could have a seriously damaging effect on them in the long-term.

Let’s hope some good thought goes into this over the next couple of days; Though Brown and Alistair Darling will probably dither and change their minds a thousand times before they make the wrong decision!

Update

The Lloyds TSB have now officially signed a deal to take over HBOS. The Guardian has written an interesting piece on ‘ripping up the financial rule books’.

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