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31/09

27 March 2009

Statement on the Government Guarantee Arrangements for Bradford & Bingley plc

The Treasury has today sought approval from the European Commission (the “Commission”) to approve the continuation of the guarantee arrangements in relation to certain wholesale borrowings, and derivative transactions of and wholesale deposits with, Bradford & Bingley plc (“Bradford & Bingley”) which were announced on 29 September 2008.

The guarantee arrangements will remain in place while the Commission considers the Treasury’s request.  If approved by the Commission, the guarantee arrangements will continue until the wind-down of Bradford & Bingley is completed.

Arrangements will be put in place to ensure that Bradford & Bingley will pay an appropriate fee for the provision of these guarantee arrangements in order to ensure it does not receive a commercial advantage.

Notes for Editors

On 29 September 2008 the Treasury put in place guarantee arrangements to safeguard certain wholesale borrowings and derivatives transactions of, and wholesale deposits with, Bradford & Bingley existing as at midnight on 28 September 2008.

The detail of these guarantee arrangements is set out in the Treasury announcement dated 29 September 2008.

As set out in the announcement of 29 September 2008, the continuation of the guarantee arrangements beyond six months requires Commission approval in accordance with the state aid rules of the European Community.

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