EU approves British bail-out of mortgage bank

October 1st, 2008 - 6:02 pm ICT by IANS  

Brussels, Oct 1 (DPA) The European Union (EU) Wednesday approved in record time Britain’s nationalization of troubled financier Bradford and Bingley, the country’s eighth biggest mortgage lender, saying that it was in line with EU rules.On Monday the British government decided to take the lender into public ownership and sell off its savings and deposits business to Spanish banking giant Santander in a deal which the buyer valued at 612 million pounds ($1.1 billion).

The move was made in consultation with experts from the EU’s executive, the European Commission, which oversees the bloc’s rules on competition and state aid.

On Tuesday, the British government officially notified the commission of its action, which came after the weekend’s partial nationalization of Dutch-Belgian banking giant Fortis in a further sign of the financial storm now sweeping across Europe.

And within 24 hours the commission decided that the British move was in line with EU rules on rescue aid, which is permitted as long as it is limited to a six-month period and the time is used to restructure the company.

Britain has pledged to submit a restructuring plan by March 29, the commission said in a statement.

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