EU Continues To Probe Dutch Support To ING; Extends Deadline
15 September 2009 - 8:31PM
Dow Jones News
The European Commission Tuesday said it is extending its
antitrust investigation into Dutch government support for troubled
bank ING Group NV (ING) on concerns over valuation.
The commission also said the aid measure could stay in place for
the duration of the probe.
The commission in mid-March cleared the Dutch government to help
ING handle illiquid assets for six months.
Under the plan, the government bought the right to cash flows on
80% of ING's $39 billion portfolio of U.S. mortgage loans, mostly
consisting of Alt-A mortgages, for about $28 billion. Alt-A
mortgages are a category of loans rated between prime and
sub-prime.
The commission has said the price paid for the cash flows wasn't
"conservative enough," and found that a significant proportion of
securities were valued above the purchase price.
If the commission finds that its concerns are justified, ING
will have to increase payment to the Dutch government.
-By Peppi Kiviniemi, Dow Jones Newswires; +3227411483;
peppi.kiviniemi@dowjones.com