As far as the title goes it should be clear that the word albatross here is not following its American usage as a term for a double eagle, or 3-under par on any one golf hole.  Rather we intend the British usage where it means an encumbrance, or a wearisome burden as in Samuel Taylor Coleridge’s poem, The Rime of the Ancient Mariner.

This blog was not intended as only a record of the gyrations of the UK banking meltdown.  However today’s headline almost passes belief.  Pressure on Brown as Lloyds ‘to lose £26bn’.

LLOYDS Banking Group could suffer additional losses of £16 billion, analysts warned as they downgraded the firm’s credit rating. The withdrawal of the triple-A rating by Moody’s Investor Services follows the banking group’s profit warning of a £10 billion loss.  But according to analysts, Friday’s predictions, blamed on the risky acquisition of Halifax Bank of Scotland (HBOS) by Lloyds, will be just the beginning of even deeper losses during the downturn.

This puts into even greater contrast the kind of headline we all saw only six days ago: Lloyds chief executive Eric Daniels ‘won’t take bonus’ for last year.

Lloyds Banking Group is 43% owned by the taxpayer and his decision emerged hours before he and other bank chiefs were due to face a grilling from MPs.  Tory MP Michael Fallon, vice-chairman of the all-party Commons Treasury committee, stressed that publicly owned banks should cut back dramatically on the special payments.

Further Stop Press Item: Chancellor sets RBS bonus limits

Chancellor Alistair Darling has announced that the government is limiting bonuses paid out to staff by the Royal Bank of Scotland (RBS).  Mr Darling said bonuses at RBS would be cut from the £2.5bn paid last year to £340m. There would be “no reward for people who have failed,” he added.  And bonuses will no longer be paid in cash, but in shares.  The bank would pay “the minimum it can with regard to its legal obligations,” the chancellor said, referring to the fact that some employees are contractually obliged to receive bonuses.

Alistair Darling was quoted as saying, “What you’re now seeing is a cultural change”.  Hopefully this is the start of much more realism in the way the UK Government is tackling this whole sorry mess.

Related articles by Zemanta

• Pressure grows on Brown over Lloyds merger deal (guardian.co.uk)

Technorati Tags: albatross, HBOS, LLOYDS Banking Group, meltdown, Royal Bank of Scotland