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EU approves UK finance measures | EU approves UK finance measures |
(about 1 hour later) | |
The European Commission has approved British government changes to its support package for the banking sector. | The European Commission has approved British government changes to its support package for the banking sector. |
The original support measures had been approved by the commission in October, when it first became clear that government intervention was necessary. | |
The changes relate to fees paid by banks to the government, and increase the number of currencies in which government guarantees can be issued. | The changes relate to fees paid by banks to the government, and increase the number of currencies in which government guarantees can be issued. |
The commission also approved rescue measures for Germany, Italy and Spain. | |
The decisions should clear the way for more cash injections and loan guarantees to troubled banks. | |
Common approach | |
The changes bring the British package in line with those of other EU members. | The changes bring the British package in line with those of other EU members. |
"The commission therefore concluded that the UK support measures, as amended, are compatible with the common market," a commission statement said. | "The commission therefore concluded that the UK support measures, as amended, are compatible with the common market," a commission statement said. |
From the start of next year, the fee payable to the government on guaranteed liabilities will be based on an annual rate 0.5% plus the financial institution's standard five-year credit default swap rate. | From the start of next year, the fee payable to the government on guaranteed liabilities will be based on an annual rate 0.5% plus the financial institution's standard five-year credit default swap rate. |
The government will also be able to guarantee debt issued in Japanese yen, Australian dollars, Canadian dollars and Swiss francs. | The government will also be able to guarantee debt issued in Japanese yen, Australian dollars, Canadian dollars and Swiss francs. |
Currently, it can only guarantee debt in sterling, US dollars or euros. | Currently, it can only guarantee debt in sterling, US dollars or euros. |
Also, financial institutions will be able to roll over guarantees on some instruments until April 2014 - two years beyond the current limit. | Also, financial institutions will be able to roll over guarantees on some instruments until April 2014 - two years beyond the current limit. |
The European Union has put pressure on individual member states to meet uniform standards in their attempts to bail-out financial institutions. | The European Union has put pressure on individual member states to meet uniform standards in their attempts to bail-out financial institutions. |
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