The European Commission has approved the rescue aid the Danish authorities have granted to Fionia Bank, the commission said on Wednesday.
Fionia Bank, one of the largest banks in the country, is a regional bank with a solid market base in Funen, Denmark.
"The rescue aid was necessary to avoid the insolvency of Fionia Bank which would have entailed a risk for the stability of the Danish financial markets," the EU Competition Commissioner Neelie Kroes said in a press release.
The aid is in the form of a credit facility of up to 685 million euros and a 134 million euros capital injection to bring the level of solvency up to a constant 11.5 percent.
The measure constitutes an adequate means to remedy a serious disturbance in the Danish economy while avoiding undue distortions of competition, the commission said in a press release.
Fionia Bank experienced problems in late 2008 and was ordered by the Danish Financial Supervisory Authority to increase capital ratios.
The measures taken by the Danish authorities were appropriate to remedy Fionia Bank's solvency problems and restore confidence in the Danish financial markets, the commission said.
Source: Xinhua
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