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Major banks meet as credit crisis deepens; In association with Chadwick Lawrence LLP SOLICITORS.

Byline: By HENRYK ZIENTEK Business Reporter

BOSSES of major British banks were meeting Bank of England governor Mervyn King today - amid a worsening of the credit crisis.

The meeting follows a volatile day on the stock market yesterday when the share price of one leading bank fell by 20% at one stage amid accusations of traders spreading false rumours and dealing off the back of them.

The Bank of England made an unprecedented move to deny the rumours that Halifax Bank of Scotland had turned to it for emergency funding.

A spokesman for the Bank of England said today's meeting was scheduled last week and is not in response to any specific event.

The spokesman described the meeting as part of a "regular exchange of views" between the central bank and high street lenders - but it seems inevitable that yesterday's activities will be mentioned.

Meanwhile, the Financial Services Authority has launched an inquiry into yesterday's unusual trading activities.

Sally Dewar, managing director for wholesale and institutional markets at the FSA, said: "We will not tolerate market participants taking advantage of the current market conditions to commit abuse by spreading false rumours and dealing on the back of them."

HBOS closed 7% down in London despite slamming yesterday's rumours as "malicious" and "lies".

The FTSE 100 Index slipped by more than 1% - closing 60.2 points down at 5545.6, led by HBOS's falls.

The US the Dow Jones industrial average fell by 2.36% while Hong Kong's Hang Seng Index was down by 3.2%.


KING PIN: Bank of England governor Mervyn King
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Title Annotation:Business
Publication:Huddersfield Daily Examiner (Huddersfield, England)
Date:Mar 20, 2008
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