HBOS was a long way from failure

TERRY Murden, in an otherwise excellent article ('Now the HBOS deal is done, the anxious wait begins for job cuts', Business, December 14), states what may seem plain fact, that "the real alternative to Lloyds TSB was the complete failure of HBOS". But, it was never that simple. It is not a view of the accounts, not even given the loan defaults in 2008. These are only 1.5% of the bank's assets, half of which should be recovered.

"Failure," commonly understood, means 'bankruptcy'. But there are no hard facts supporting this. Lord Dennis Stevenson said the bank was brought low by a liquidity problem.

The interbank market is lopsided, borrowers outnumber lenders, hence the Bank of England's interventions.

HBOS has substantial drawing rights at the Bank of England and the offer of a large Government stake. Its balance sheet is better than others'. It could have stayed independent. But, after a botched share issue and attacks by short-sellers that still continue,management panicked and agreed a firm deal with Lloyds TSB, brokered by the Prime Minister. Decided in haste, this will be repented at leisure.

Robert McDowell, Banking on Economics, Edinburgh