Mervyn King denies politics role in Lloyds sale

Fromer Bank of England Governor Mervyn King has denied any improper political pressure on Lloyds. Picture: TSPL
Fromer Bank of England Governor Mervyn King has denied any improper political pressure on Lloyds. Picture: TSPL
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Former Bank of England governor Lord King has rejected suggestions that he was aware of any improper political pressure in the decision by state-backed Lloyds Banking Group to sell more than 600 branches to the Co-operative Bank.

It emerged yesterday that Lord King wrote to the Treasury Select Committee (TSC) to respond to a claim made by the head of a rival bid team.

Lord Levene, who was chairman of banking consolidation vehicle NBNK Investments, had told MPs last January that Lloyds was “swayed by political considerations” when it chose the Co-op to take on the branches, and claimed the then-governor had acknowledged this in a private meeting.

But in a letter to TSC committee chairman Andrew Tyrie MP published today, Lord King rebuffed the suggestion.

“Although it seemed to me that the Government wished to ensure that, if it were possible, a plausible bid from the Co-operative Bank was able to be considered alongside other bids, that was a far cry from any improper conduct in the bidding process,” he said.

“Had I received evidence of improper behaviour I would have raised that with the regulator, the Government, and if necessary, Parliament, through the Treasury committee.”