HBOS was a long way from failure
"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