"Restructuring in the banking sector during the financial crisis: the Northern Rock case"*I. Introduction In normal circumstances the exit of inefficient firms is part of a self-correcting mechanism in the market. In this way market-based competition penalises those who make less efficient choices about how they organise themselves, what risks they take and what they produce. Unconditional State support granted to companies in difficulties would hinder the necessary adjustment process and generate harmful moral hazard. As a result, the provision of rescue or restructuring aid to companies in difficulty is generally considered as highly distortive to the markets and may only be regarded as legitimate subject to strict conditions. In the context of the financial crisis the Member
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The EU Commission authorises UK restructuring aid package in the banking sector (Northern Rock)
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