Some big names are going down in this crisis. We’ve already lost Bear Stearns and Lehman Brothers – both of which date far into the 19th century. General Motors may be next in the American line of fire.
But Great Britain, where modern industrial capitalism was born, has finally sealed the fate of one of its oldest firms. Lloyds TSB, first created in 1765, has now been taken over for a price of 260 billion pounds.
Lloyds was known, historically, as a conservative bank that eschewed sub-prime style mortgages in Britain. But in September, Gordon Brown convinced Sir Victor Blank to acquire the troubled HBOS – a bank filled to the gills in sub-prime garbage – Lloyds inherited the toxic sludge. Not surprisingly, many British conservatives are furious at this “Soviet-style smash and grab” of a venerable British institution (even though nobody held a gun to Blank’s head and forced him to take HBOS. In many ways, this is akin to Bank of America buying up Countrywide and Merrill Lynch, which also destroyed hundred year-plus institution.
Note that Lloyds was founded in Birmingham in the 1760s – the very earliest days of the industrial revolution. The British banking sector – Lloyds included – helped fuel the nation’s industrial revolution and turn Britain from a respected naval power to a global behemoth.
This truly is a historic moment – and not just for America.