Tonight:
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Lloyds TSB is undoubtedly the least burnt of the big British banks. As the others scrabble for capital and/or make multi-billion-pound write-offs, it sails on in relative serenity. No one talks of it making a rights issue or having to go cap in hand to persuade sovereign wealth funds that they should buy in to shore up its finances.
Lloyds never had a major business in the capital markets so, unlike the other banks which were making half their profits from gambling, it never got sucked in, and as a result was never exposed to their scale of losses. This led to it being dismissed by excitable analysts during the banking boom as boring, dull and out of touch. But it is now reaping the dividends by keeping it simple, domestic and focused.
Reports that Lloyds has been thinking about a bid for Germany's Dresdner Bank are therefore slightly alarming. It is easy to see what the temptation might be. Dresdner is owned by Allianz, one of the world's biggest insurance groups, but it was one of those purchases that seemed like a good idea at the time, though no one ever explained why. Neither side subsequently profited from the relationship. Likewise, Lloyds TSB's expensive purchase of Scottish Widows, a business that is all right now, but still not worth anything like what was paid for it a decade ago.
It is inevitable that some bright investment banker would think it made sense for Lloyds in effect to swap Scottish Widows for Dresdner, thereby putting the insurance business back under insurance ownership and the banking business in the hands of bankers.
As a deal, it has that plausible impression of tidiness and logic that makes it so much easier to sell. But underneath, it is a dangerously seductive idea which ignores from the Lloyds perspective that although it is the number three bank in Germany, Dresdner has long been a dog. The German banking market is difficult anyway because the power of state-subsidised Landesbanks means it has never consolidated like other European markets, and labour and other laws make it difficult to make the kind of efficiencies seen elsewhere.
But even taking account of this, it has never done well - and its strong historic links with the East mean it is still very exposed to the least productive part of the German economy. And it might well bring with it Dresdner Kleinwortan investment bank that has struggled for years, partly because its parent has never been willing to give it the stability and commitment it needed and partly because no one was ever quite sure what it was for. There is no reason to believe it would be transformed under Lloyds.
That indeed it the problem. The wise Italian businessman Paolo Scaroni, who at one time ran glassmaker Pilkington, had a rule that none of his team was allowed to suggest a takeover unless they could come up with a clear idea of what they would do that would be better than what the existing management was doing. In other words, they needed to be clear in advance about how they would improve the business.
Pilkington did few takeovers as a result. Similarly, Lloyds TSB should steer well clear of Dresdner unless it is very clear indeed about how it might succeed with the business when several generations of German management have failed. THE Financial Services Authority's much-trumpeted search for the rumourmongers and market abusers who so upset the market in HBOS shares a few weeks ago has apparently come to nothing - which is not really a surprise, given how hard these things are to prove.
It appears no evidence has been found that is incriminating enough to bring charges, so it will all be quietly dropped. What this does do is give a further line of explanation to the thinking behind the FSA's recent introduction of a requirement to disclose short sales during rights issues. It can't find the people who might be up to mischief, so it wants a few clues as to where to look next time.
