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False rumours spark panic at HBOS
21 March 2008
False market rumours fuelled by short-sellers nearly toppled, HBOS, one of the UK's biggest banks it has emerged.
On Wednesday morning the shares in the bank fell by up to 20 per cent in 13 minutes prompting an angry response by the bank and the Financial Services Authority (FSA) about spreading rumours in a volatile market.
Andy Hornby, chief executive of HBOS, immediately issued an angry denial: "It's categorically untrue that we've approached any central bank for funding," he said shortly after his share price was cut by a fifth.
Savers are already on edge after the run on the Northern Rock bank last year, but the government and FSA have moved swiftly to quell market fears.
The FSA is trying to trace the source of the rumour and has made it clear that it will prosecute anyone found guilty deliberating trying to manipulate the market with false rumours.
An FSA spokeswoman told the Times on Thursday afternoon that many traders were coming forward to 'shop' the short-sellers involved: "We have found that other market participants are very keen to talk to us about these matters and we're very keen to talk to them."
The Bank of England has again moved to assure savers that there deposits are safe. 
