THERE will be lit­tle room at the top ta­ble for HBOS ex­ec­u­tives in the post­merger board that Lloyds TSB chief ex­ec­u­tive Eric Daniels un­veiled yes­ter­day. This was to be ex­pected, even though his­tory is likely to show bad luck as much as man­age­ment er­rors con­trib­uted to the Hal­i­fax Bank of Scot­land’s fall from grace.

It seems likely the share-swap merger will pro­ceed, if for no bet­ter rea­son than in­sti­tu­tional in­vestors have hold­ings in both banks.

Small in­vestors, who are more likely to own shares in one or other of the two, may prove less san­guine and there­fore more vo­cal. But the Gov­ern­ment has too much rid­ing on the out­come to risk its fail­ure.

How much in­de­pen­dence Lloyds will ab­di­cate to qual­ify for state help to the detri­ment of share­hold­ers is un­clear. Daniels and the new-look bank will have it all to prove, come the com­ple­tion of the merger in the New Year. FOR the mo­ment, Wall Street in­vestors are choos­ing to fo­cus on the pos­i­tive. The U.S. econ­omy was of­fi­cially on the brink of re­ces­sion yes­ter­day, with the news eco­nomic out­put fell 0.3 per cent be­tween July and Septem­ber. A sec­ond con­sec­u­tive quar­ter of con­trac­tion — an al­most cast-iron cer­tainty — will qual­ify as meet­ing the tech­ni­cal def­i­ni­tion of re­ces­sion.

Yet U.S. in­vestors were ini­tially re­lieved that the drop of 0.3 per cent in the an­nual rate be­tween July and Septem­ber was not worse.

If this op­ti­mism is fol­lowed through next week, things will be looking up.

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