The Secretary of State has intervened in the regulatory clearance of the planned acquisition by Lloyds TSB of HBOS. Normally a merger between two companies with such a high level of overlapping activities and significant market shares would automatically undergo close scrutiny by competition authorities, and any decision on the case would be made purely on the basis of whether the deal would significantly lessen competition. However, the Secretary of State is empowered to intervene in certain cases where there is a public interest basis for doing so. This does not mean there will be no competition review of the case. The Office of Fair Trading is still required to report to the Secretary of State on whether the merger qualifies for investigation and give its assessment of the competition issues. The Secretary of State will also have to pass secondary legislation to ensure that financial stability falls within the category of “public interest” reasons for which intervention is permitted. This legislation will be laid before Parliament after the summer recess. Once passed, the Secretary of State will take a final decision on whether the merger should be cleared or referred to the Competition Commission.