The former chief executive of Lloyds Banking Group has defended a decision to lend HBOS £10bn ahead of a crisis-era takeover of its rival, despite red flags from lawyers.

Eric Daniels told the UK High Court today that the loan facility was extended after Lloyds' management had decided it was safe to do so. He said: "It was unusual times but that doesn't mean it did not meet all of our risk criteria."