Contingent capital and the black horse’s head

November 3, 2009

Lloyds seems to be taking a leaf out of Vito Corleone's book: if you need someone to do something that they don't want to, you have to make them an offer they can't refuse. For the mafia boss in The Godfather, that meant decapitating a horse. For Lloyds, the UK bank whose logo is a black horse, it means threatening to cut off interest payments on your own debt.

Lloyds escape plan won’t come cheap

November 2, 2009

What's the price of freedom? Ask Lloyds Banking Group, which is hoping to persuade bondholders to buy into a new kind of risky subordinated capital in a bid to avoid having to use the UK government's asset protection scheme. This Houdini-esque escape trick will be expensive -- if it can be pulled off at all.