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Eric Daniels defends Lloyds’ high street dominance

Eric Daniels, chief executive of Lloyds Banking Group,  has defended the bank’s high street dominance amid reports the bank could be broken up.

The Financial Times reports that last week Clare Spottiswoode, member of the Commission on Banking, hinted that the HBOS deal could be reversed.

Speaking at a roadshow for the Commission she told delegates: “We might suggest reversing what happened on that day a few months ago when Lloyds took over another bank.”

But Daniels says he has an agreement with the previous government that the deal would stand and called on the government to honour that pledge.

He says: “There was a sentiment that financial stability was more important and that the issue of competition took second place. As a result the secretary of state signed off the deal. That is a matter of public record.”

Lloyds has submitted a “substantial” response to the Commission on Banking.

Daniels makes the case that a concentrated market does not mean an uncompetitive one.

He says: “Look at Canada, look at Australia. They have been stable yet concentrated. One of the popular misconceptions is that competition and concentration are in conflict, that there’s some kind of trade-off to be made between stability, competition and concentration.

“Concentration can lead to stability but doesn’t necessarily lead to a lack of competition.”

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  • Grey Haired Underwriter 25th November 2010 at 2:05 pm

    There can’t be competition whent the major lenders are being subsidised by the Government’s special liquidity scheme. I am fed up with watching the smug banks, having been bailed by the likes of you and me, develop what is almost a monopoly on the mortgage market also at the expense of the tax payer. The question that really concerns me hwoever is how will they repay the special liquidity scheme or are they once again banking on their size keeping them safe? If there was ever a reason for the dismantling of the banks it is the simple fact that they will feel like they can be a drain on you and me ad infinitum – why shouldn’t they have to face the same consequences as the Derbyshire or Stroud & Swindon or Chelsea
    etc.

    Let’s have a level playing filed and let the banks feel as vulnerable as everyone else and perhaps then we would have a truly competitive market