THE investigation into the collapse in the share price of HBOS last month on a rumour that the bank was facing a liquidity crisis, has been widened to take in other banks that have suffered similar falls.

The Financial Services Authority, the City regulator responsible for suspect dealing in shares, has linked up with regulators in Europe and America to examine falls in Lehman Brothers, which trades on Wall Street, and Anglo Irish Bank. Regulators have swapped information to determine whether there is a pattern to the rumours and whether similar names appeared in all three situations.

The FSA probe, which started four weeks ago, has been its most intense to date. It started after a 17% fall in the HBOS share price and led to an unprecedented statement from the Bank of England rebuffing any notion that the bank had asked it for emergency support.

Every investment bank that traded in HBOS shares has been told to send in details of phone calls and e-mails. Every short trade — where a trader has made a bet that the share price would fall — has been studied. A number of them, particularly positions held by the big hedge funds, are legitimate.

It is possible that, despite the thoroughness of the investigation, no charges will be brought against any individual.

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