Brussels, 23rd December 2008
Competition Commissioner Neelie Kroes said: "The excellent cooperation with the UK authorities and streamlined procedures have once again led to a quick and effective Commission decision. On this basis we have approved the amendment of the UK scheme in a period of fast evolving financial markets in order to support banks to provide sufficient credit to the UK economy".
On 18 December 2008, the UK notified a set of modifications it intended to make to the UK support measures to the banking industry (see IP/08/1496). These amendments were aimed at adapting the package to the Commission's Communication on recapitalisation (see IP/08/1901) and to bring it in line with schemes in other Member States.
Concerning the UK Recapitalisation Scheme, the Commission accepted, in line with its Communication on recapitalisation that fundamentally sound banks do not need to provide a restructuring plan, but may instead provide a report that illustrates that they remain fundamentally sound and how they plan to repay the state capital.
Concerning the UK Guarantee Scheme the main amendments concern the following basic features:
In addition, the requirement of a balance sheet growth limitation to certain thresholds in the Guarantee and Recapitalisation Scheme will no longer apply to those banks that can be considered as fundamentally sound.
The Commission is satisfied that as a result of its dialogue with the UK authorities, the UK support measures to the banking industry have been adjusted to changing market conditions. The adjusted package takes into account the latest guidance of the Commission.
The non-confidential version of the decision will be made available under the case number N650/2008 in the State Aid Register on the DG Competition website once any confidentiality issues have been resolved. New publications of state aid decisions on the internet and in the Official Journal are listed in the State Aid Weekly e-News.