That Hbos-Lloyds Story and its implications

There has been a fair amount of controversy over Robert Peston's exclusive last week as he broke to the nation that HHOS was in discussions with Lloyds TSB and that there may have been trading in stock prior to the official announcement.

Peter Horrocks now responds to the criticism over at the BBC editors blog

Last Wednesday, after the announcement of the likely HBOS takeover, we received initial reports of queues forming outside HBOS branches in Middlesbrough and Glasgow. We were aware that there was a possibility of outflows of deposits from HBOS. However we decided that queues in two places were not conclusive evidence of a widespread financial phenomena. We decided to wait and watch. The queues later dissipated. I have no doubt that if we had gone ahead at once with broadcasting pictures of those queues that could have had an impact on HBOS.

The reporting of the breaking news has been criticised for being of a highly speculative nature and remember that this time last year it was Peston that was tipped off over what became a run on the Northern Rock .

A number of outlets have speculated that persons unknown made money out of the announcement .This from John Swain in the Telegraph

Speculators made £190 million by trading HBOS shares shortly before news of the bank’s rescue by Lloyds TSB was announced, it has emerged.News of talks about the takeover came in a broadcast made by Robert Peston, the BBC’s business editor, at 9am on Wednesday morning.
By that point, HBOS’s share price had plunged to just 88p. Yet within 45 minutes, Mr Peston’s broadcast had sent them soaring to 215p.

Peston though makes clear that the story was not broken before 9.00am that day.