FSA to launch probe as Bank counters HBOS rumours

The British financial regulator has confirmed that it is to investigate share dealing made on the back of rumours that HBOS, a British bank, was short of liquidity. The Bank of England has also taken the highly unusual step of calling the British press to deny that HBOS was in trouble.

"There has been a series of completely unfounded rumours about UK financial institutions in the London market over the last few days, sometimes accompanied by short-selling," Sally Dewar, the managing director