The Government and its financial regulator sought yesterday to calm fears about the health of Lloyds Banking Group before the start of trading in the embattled bank's shares today.

The Treasury tried to dampen talk of Lloyds being nationalised after Friday's unveiling of an £11bn loss at Halifax Bank of Scotland, the stricken bank it bought last month in a Government-brokered deal.

Sources pointed to the Chancellor's comments at the weekend's G7 meeting that banks were 'best run on a commercial basis in the private sector, properly supervised and regulated' and that 'nothing has changed' in relation to ownership.

The Independent