Osborne dismisses allegations of pressure in Lloyds deal

Osborne dismisses allegations of pressure in Lloyds dealUK's Chancellor George Osborne has dismissed suggestions that there was undue pressure in the Lloyds deal and said that the UK government did not put "undue pressure" on the Co-op to buy the branches.

There were allegations that UK's Treasury interfered with Lloyds Banking Group's decision to sell more than 600 bank branches to the Co-operative Group. Osborne told MPs that the authorities did not interfere in the deal. Lord Levene had accused the Lloyds Banking Group and the Government for acting in `bad faith' in the process to auction more than 600 branches of the bank in the UK.

Experts said Lloyds was "swayed by political considerations" in its decision to sell the branches to the Co-operative Bank. The "Project Verde" process, which led to a £1.5 billion hole in Co-op Bank's finances, was a result of a directive form the European Commission that required the bank to sell branches in return for Lloyds's taxpayer bailout.

UK Financial Investments (UKFI), the Treasury unit that manages the government had sold 6 per cent of the issued share capital of the banking group in the market. The UK government has raised about 3.2 billion pounds or about $5.28 billion during the month of September, 2013.