Press Release: State aid: Commission approves Finnish state guarantee for Kaupthing Bank

The European Commission approved under EC Treaty state aid rules a Finnish state guarantee accompanying a private sector arrangement to the benefit of depositors in the Finnish branch of the insolvent Kaupthing Bank. The measure guaranteed the banks who ensured full compensation of Kaupthing's Finnish depositors against legal risks. The Commission found the measure to be in line with its Guidance Communication on state aid to overcome the financial crisis. In particular, the measure was necessary to preserve confidence in the financial markets and was limited to the minimum necessary to achieve this objective. The Commission therefore concluded that the scheme was an adequate means to remedy a serious disturbance of the Finnish economy and as such in line with Article 87.3.b of the EC Treaty.