Bank rescue bid was legal, says EU

My Account
Logout

Create an Evening Standard Account

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Welcome! Sign in here

Use your social network

Save time by using your existing account to sign in to Evening Standard

We'll never share your information or post anything to your account without your permission

Forgot your password ?

Registration

* indicates fields that are mandatory

Email *

Password *

Confirm Password *

First name *

Surname *

Postcode *

Country *

Mobile phone number

Username *

Gender *

Year of birth *

When you sign up...

You will have access to all our online competitions, discounted offers and can post comments on our site.

You will also receive The Weekender newsletter sent every Thursday - it’s full of fantastic offers and ideas for the weekend. You can update your email preferences in your account page when you log in.

Other newsletters and emails

Homes & Property Newsletter - Yes I want to receive the weekly email with all the latest news on property in the capital

Occasionally we would also like to send you relevant emails detailing specific offers either from ourselves or carefully selected partners. If you would prefer not to receive these then please tick the appropriate boxes below. We will never pass on your details.

I do not want to receive additional offers and information from the Evening Standard

I do not want to receive additional offers and information sent by Evening Standard on behalf of carefully selected partners

Terms and Conditions

* I have read, understood and agree to be bound by the terms and conditions of Evening Standard

Registration

Mail Sent for Registration Confirmation.

A confirmation email has been sent. Please activate your account by clicking on the activation link sent in your mail box.

EU state aid authorities said that the emergency funding to allow the bank to overcome a liquidity shortfall fell within EU rules on rescue aid.

"With good co-operation from the member state concerned, the Commission can move very fast to provide legal certainty," said EU Commissioner Neelie Kroes.

The global credit crisis forced Northern Rock, Britain's fifth-largest mortgage lender, to approach the Bank of England for emergency funding.

"These aid measures can be authorised as rescue aid," the EU's executive Commission said in a statement.

Northern Rock's problems stemmed from market turmoil sparked by the US subprime lending crisis.

In September it was under such financial pressure it needed the Bank of England for liquidity assistance while a long-term solution was worked out.

Customers made a run on the bank to retrieve their money, and the government had to act to soothe worries and make sure the crisis did not spill onto other banking institutions. The government announced that it would guarantee personal savings at Northern Rock up to £35,000.

The government formally notified the Commission of the support package last week. It has promised to give the Commission a restructuring plan for Northern Rock by March 17.

Last week, Northern Rock said it will hold accelerated takeover discussions with a consortium led by Virgin Group. Virgin proposes to re-brand Northern Rock as part of Virgin Money business and said its consortium would repay £11 billion of the Bank of England loan.