Even by the standards of the credit crunch, the past few days have been momentous. For the two million shareholders of HBOS, the banking giant that owns Halifax and Bank of Scotland, it's been a week that they are not going to quickly forget.

Big City investors rushed to dump HBOS shares yesterday, which lost 41 per cent of their market value at one point, after questions were raised about its ability to keep funding its operations in these treacherous financial markets.

Repeated assurances from the country's biggest mortgage lender that it was strong enough to withstand the turmoil, failed to stem concerns that toxic investments on its balance sheets and its exposure to falling house prices put it at risk.

But even though the extraordinary fall in HBOS's share price will have left many of its investors with their hearts in their mouths, now is not the time to be dumping its shares. (As I write, news is emerging of a possible takeover by Lloyds TSB, which has sent the shares higher. But even before this dramatic development selling out would not have made sense.)

HBOS is not Northern Rock. There are only two things that are likely to send it to the dogs. A Northern Rock style run on the bank by savers would do the job. The cold shoulder by wholesale providers of funds would also have a calamitous effect. But, neither has happened yet despite the barrage of bad news.

That's not to say that it doesn't have troubles. With a massive 20 per cent of the mortgage market it is bound to suffer as the housing market slump deepens and more people default on their mortgage payments.

However, investors can take some comfort from the fact that it recently raised £4 billion in capital to cushion itself against those losses.

Nor is it just HBOS that keeps drumming home the message that its finances are on a stable footing. The Financial Services Authority (FSA) rushed out a statement this morning which said: "We are satisfied that HBOS is a well-capitalised bank that continues to fund its business in a satisfactory way."

The FSA hasn't exactly covered itself in glory over the past year - many believe it could have taken action to prevent the Northern Rock disaster at a much earlier juncture. However, one lesson it must have learnt is not to make a statement like this unless it's sure of what it's talking about. Porkies have a habit of being found out.

These are not happy times for HBOS investors. But, in most cases, to sell out now would trigger a huge loss - its share have lost nearly 80 per cent of their value in the past 12 months. Such action would be financially damaging and self-defeating.

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