Scots bank crisis a 'humiliation'

Lord Forsyth said Scotland's reputation had "taken a knock"

The "loss" of Scottish-based banks HBOS and The Royal Bank of Scotland is a "national humiliation", according to a former Scottish secretary.

Lord Forsyth told BBC Scotland the impending takeover of HBOS by Lloyds TSB was "its best chance".

But the Tory also said Scotland's 300-year-old reputation for financial excellence had "taken a knock".

His comments also came after the UK Government announced it was set to own 57.9% of RBS.

The move came after shareholders bought only a tiny proportion of the new shares being offered by the bank.

Lord Forsyth, who was the last Conservative to serve as Secretary of State for Scotland, questioned whether the UK Government's bailout of banks would throw up more problems.

"Why do we think that, just because we've put a lot of money into those banks now, that there are still not horrors on the balance sheets yet to be revealed?" he asked on BBC Scotland's Politics Show.

He added: "I think the loss of the Royal Bank and the Bank of Scotland is a national humiliation. I feel it very deeply.

"Our reputation, built up over 300 years in Scotland, for financial expertise and prudence, has taken a real knock."

However, Lord Forsyth said the banks could not be allowed to fail, and criticised those who wanted to keep HBOS independent "without a proper business plan, without any knowledge of what's on its balance sheet, without any funding".