The European Commission has welcomed the Treasury's bank plan amendments.
The European Commission gave its backing to Treasury plans to prop up the UK's beleaguered financial services sector today.
In a bid to improve credit conditions, the government proposed allowing British banks to use a credit guarantee scheme worth around £250 billion. According to the plans, guaranteed financial instruments could also be issued by the banks in a wider range of currencies than before.
Both of these changes are amendments to the Treasury's original plan to support banks, which was approved by the Commission in early October.
The Brussels-based Commission said that these moves were compatible with similar measures currently being taken on the continent - and therefore are allowed by EU rules.
Competition commissioner Neelie Kroes said: "The excellent cooperation with the UK authorities and streamlined procedures have once again led to a quick and effective Commission decision. On this basis we have approved the amendment of the UK scheme in a period of fast evolving financial markets in order to support banks to provide sufficient credit to the UK economy."
In a statement, the Commission added: "[We are] satisfied that, as a result of its dialogue with the UK authorities, the UK support measures to the banking industry have been adjusted to changing market conditions."
