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Bradford & Bingley liquidation cleared by European Union

City A.M. Reporter
EU REGULATORS yesterday cleared the liquidation of failed British bank Bradford & Bingley after a request from UK authorities, which broke up and partly nationalised the lender nearly two years ago.
Hit by a sharp rise in funding costs during the credit crunch, Bradford & Bingley sold its savings business and branch network to Spain’s Banco Santander in 2008 while the British government took over its loan book.

“The UK authorities’ market-oriented solution has avoided any disproportionate distortions of competition while enabling the preservation of the viable parts of the business,” Competition Commissioner Neelie Kroes said in a statement.

The European Commission said the liquidation period would cover more than 10 years.

The Commission added the winding-down plan foresaw the extension of UK rescue measures already approved by the European Union executive and a potential capital injection.

Bradford & Bingley had specialised in risky self-certified mortgages, which the City watchdog the Financial Services Authority (FSA) has since banned, and also lent to buy-to-let property investors.