Barclays Bank on the other hand are going to try and raise £6.5bn themselves, rather than suffer the same feat as the other three.

In a normal situation the government would not let this happen and there are competition laws to stop it from happening. However if one of the UK’s major banks such as HBOS went bust it could have a catastrophic effect. This is the reason the government is easing of the rules, to enable the merger of these two giants.

One calculation suggests that some 38 million people in the UK deal with the two banks somehow and between them they would have 28% of the UK’s mortgage market.

Lloyds TSB was created out of the merger of Lloyds Bank and the Trustee Savings Bank in 1995, while HBOS was created from the merger of the former building society turned bank Halifax and the Bank of Scotland in 2001.