PRESS DIGEST - Financial Times - May 18

Financial Times

LLOYDS CHAIRMAN QUITS OVER HOBS

In what could be the first move to restore the bank's credibility among shareholders after its much-criticised takeover of HBOS, the chairman of Lloyds Banking Group (LLOY.L) Sir Victor Blank will step down from his position before June 2010. Sir Victor decided to retire early in the face of a lack of public support from UK Financial Investments, the body that runs the taxpayer's 43 percent stake in the bank, and a potential shareholder revolt against Lloyd's management at next month's annual meeting. Although Sir Victor is close to Gordon Brown, the prime minister wishes to maximise investor confidence in Lloyds management, at time when UKFI considers selling some or all of the government's stake within the next year.

EXECUTIVES DROP OUT AFTER FSA SCRUTINY

After the Financial Services Authority questioned their competence for the job, several executives lined up for senior positions at British financial institutions have withdrawn. The development comes as further evidence of the hands-on approach at the FSA in vetting executives and directors of large banks following the near-collapse of several large lenders. Prospective chairmen, chief executives, finance directors and risk directors of large financial institutions are now questioned by the regulator to make certain that they have a proper understanding of the institution they are joining, the industry in which it operates, and their regulatory responsibilities. "In a number of cases applications have been withdrawn following interviews that raised questions concerning the candidate's fitness and propriety," chief executive of the FSA Hector Sants told the Association of Corporate Treasurers.

BUSINESSES SEE LEGAL ACTIONS RISE OVER JOB LOSSES

Lawyers state that a growing number of City workers who lost jobs as a result of the recession are bringing legal actions against former employers. While employers notice a change in approach as sacked staff make multiple claims, experts say that other workers are trying to circumvent statutory financial limits on compensation by raising discrimination, whistleblowing and other non-standard complaints. "The difficulty of finding re-employment after redundancy in the current climate is leading to increased levels of litigation - some of it speculative," comments Kathleen Healy, employment partner at Freshfields Bruckhaus Deringer