Competition concerns mean Lloyds should be required to float HBOS following failure to divest branches to the Co-op

[by Bruce Lyons] It has just been announced that the sale of 632 Lloyds branches to the Cooperative Bank has fallen through.  Some people thought this would have created a competitive market structure in UK retail banking.  The lessons from research on divestitures by the US FTC, EU DG Competition and academics suggest otherwise.  In particular, necessary conditions for a divestiture package to restore competition include that the package must not be carved out of an existing business, it must have sufficient scale and scope, and it should not be sold to a weak buyer.  The proposed sale of branches to the Co-op met none of these basic requirements.  Why not?  And is there a way forward from here?