EU Opens Probe Into Overhaul of Latvia’s Mortgage and Land Bank

The European Commission today gave temporary approval to state aid for Latvia’s Mortgage and Land Bank, while also opening an in-depth probe into whether the support is in line with antitrust rules.

The aid includes a $132.4 million recapitalization of the lender in March 2010, as well as guarantees and a “standby liquidity facility” to aid the bank if it has problems with cash flow, the regulator said in an e-mailed statement.

The EU “needs to gather all the necessary information to ensure that the aid granted to MLB’s commercial activities is compatible with the Commission’s state-aid rules on restructuring aid,” the regulator said.

To contact the reporters on this story: Jim Brunsden in Brussels at jbrunsden@bloomberg.net;

To contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.net

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