Lloyd’s Banking Group may face calls for break up

23 November 2010

A banking commission may advise the UK government to break up Lloyds Banking Group, a member of the body has said.

Clare Spottiswoode, a member of the Independent Commission on Banking (ICB), which was set up to advise the authorities on how the future of the banking industry might look made the comments at a meeting in Leeds.

She said that the ICB may suggest that Lloyds should demerge as part of wider concerns that too much power within the financial services industry lies with a small number of large institutions.

“We might suggest reversing what happened on that day a few months back when Lloyds took over another bank,” Ms Spottiswoode said, referring to its acquisition of HBOS.

The ICB member also called for greater competition within the industry as part of a wider initiative to increase stability.

She said: “We do not have a very healthy competitive market in financial services. If we have good competition people behave well ... because otherwise customers go to a competitor.”

The ICB was set up by the chancellor on June 16th 2010 and is due to make a number of recommendations on how to increase stability within the financial markets by the end of September 2011.

By Jim Ottewill

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