According to a recent report the Financial Services Authority, the UK’s financial regulator, is set to weed out the unscrupulous traders accused of starting rumours in the stock markets about the parent company of one of the nation’s biggest mortgage lenders.
The middle of last week, just before Good Friday, saw the stock markets thrown into chaos as rumours began to circulate that the Halifax Bank of Scotland was on the verge of collapse, and was set to go through a crisis similar to Northern Rock last year.
The rumours began early in the morning, and resulted in share values in HBOS plummeting in next to no time. The Bank of England press office had to quickly stem in to quash the rumours, stating that the bank was not in any crisis, and had certainly not approached the central bank for an emergency loan, as rumours had indicated.
Officials from HBOS also confirmed that the rumours were untrue, and that its books were healthy.
FSA officials have now stated that the incident was sparked by unscrupulous traders who simply wanted to abuse the stock market in order to make some money.
The FSA said that in traders such as these are exploiting the current volatile financial markets by starting rumours such as these, which many are quick to believe following the Northern Rock crisis, and many are making a fortune from scams – one trader is thought to have made £100,000 from the HBOS incident.
An HBOS official stated: ‘There is not a shred of substance whatsoever to these malicious and unfounded rumours that have been in the markets today. We are deeply concerned about the impact these rumours are having on the UK banking system.’
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