The proposed merger between Lloyds TSB and Halifax Bank of Scotland (HBOS) has brought some much-needed stability to the financial markets, it has been claimed.

According to the director of MoneyExpert.com, the announcement - alongside the government's intervention - has helped to restore confidence.

Sean Gardner acknowledged that "there may well be a cost to all of us in terms of the competitiveness of the market" if the merger goes ahead.

Indeed, together the two institutions control around one-third of the overall savings and mortgage market in the UK.

However, he insisted that the enlarged bank should be a "financially sound company" that will "play a central role in the future of the banking industry".

Lloyds TSB shareholders voted in favour of the merger last week. A ballot of HBOS shareholders will take place on December 12th.

If the acquisition gains support after the second vote, it will be able to proceed, subject to other regulatory approvals.