Brussels, 02/04/2008 (Agence Europe) - On Wednesday 2 April, the European Commission decided to launch an in-depth investigation into a series of measures by the United Kingdom authorities to support the restructuring of Northern Rock, a UK mortgage bank. The measures were notified to the European Commission on 17 March 2008. The opening of an in-depth investigation gives interested parties the possibility to comment on the planned measures but does not prejudge the outcome.
Northern Rock plc, based in Newcastle-upon-Tyne, was the UK's 5th largest mortgage bank, whose core activity, mortgage lending, represented more than 90% of all outstanding loans made by the bank. On 5 December 2007, the European Commission authorised state aid measures the UK had taken in favour of Northern Rock on 17 September and 9 October 2007, finding that they complied with the rescue aid provisions of the EU guidelines on state aid for rescuing and restructuring firms in difficulty.
As a consequence of the ongoing turbulence in the world's financial markets has caused problems for other institutions, which in some case have also prompted public authorities to intervene. On 27 February 2008, the Commission opened state aid investigations concerning the state bail-outs of IKB and Sachsen LB in Germany. (L.C.)