Brussels, 06/06/2011 (Agence Europe) - On Monday 6 June, the European Commission authorised Danish aid for the liquidation of the banks Amagerbanken and Eik Bank, taking the view that this aid will correctly facilitate the liquidation of the banks and that they come with sufficient guarantees as regards any competition distortions.
As regards Amagerbanken, the eighth-largest bank of the country, which was declared bankrupt in February 2011 having been hit hard by the financial crisis in 2008, the authorisation covers a period of six months, pending the Danish authorities' presentation of a liquidation plan which could give rise to a definitive decision by the Commission. The aid includes a conditional agreement on the transfer of assets and certain liabilities, a liquidity facility agreement and a subordinated loan, all accompanied by sufficient contribution from the share-holders and debt holders, and measures aiming to limit the negative impact on other competitors.
Eik Bank, which was the largest financial establishment of the Faroe Isles with 50% of the market, will receive aid including transfers of assets and liabilities, liquidity facility agreements, credit facilities, capital injections and the underwriting of losses. At the same time, in application of the liquidation agreement concluded last year with the Danish body responsible for guaranteeing financial stability (see below), certain activities have been put up for sale by public calls for tender, whilst the others have been transferred to the body in question to be either sold or liquidated, with the ultimate aim of completing the liquidation in no more than five years. The Commission notes that, in this case as well, the aid is limited to what is strictly necessary and that, thanks to the measures taken, potential distortions of competition will remain limited.
Amagerbanken and Eik Bank, as well as Roskilde and Fionia, are the four Danish banks which, on 30 September 2010, signed liquidation agreements under the Danish bank resolution regime (see EUROPE 10226). (F.G./transl.fl)