By Foo Yun Chee
BRUSSELS, Nov 4 (Reuters) - Bailed-out banks in Ireland and Germany posed a tough challenge for EU regulators seeking to ensure fair play because of the hefty state aid granted to the lenders, the EU's competition chief said on Thursday.
The European Commission is now scrutinising restructuring plans for Anglo Irish Bank, Allied Irish Bank and building society EBS while assessing extra capital for another building society INBS.
The competition regulator is also investigating German lenders WestLB, BayernLB and HSH Nordbank on their state support.
'Important decisions should be adopted in the coming months. Allow me to mention only two examples, which I consider the most difficult ones: Ireland and Germany,' EU Competition Commissioner Joaquin Almunia said in the text of a speech at an European Banking Federation event.
'In dealing with the Irish financial entities, the Commission needs to balance the necessity of addressing the distortions of competition caused by the large aid granted to Irish banks with any financial stability concerns that arise,' he said.
On the German cases, Almunia said the three banks needed a drastic overhaul and a new business model to ensure their viability.
He also said he would toughen EU rules for banks benefiting from state aid next year as part of a strategy to wean them off state support.
'As of 1st January, every bank in the EU requiring the support of a member state under the form of capital or impaired asset measures will have to submit a restructuring plan,' he said. They would also need to pay more for their revamp.
Under the current regime, only distressed banks or those receiving substantial aid need to show a restructuring plan.
Since the credit crisis broke in the autumn of 2008, the Commission has cleared state aid worth trillions of euros for a slew of bail-outs across the 27-country European Union.
(Reporting by Foo Yun Chee; Editing by Hans Peters) Keywords: EU BANKS/ALMUNIA (foo.yunchee@thomsonreuters.com; tel +32 2 287 6844; Reuters Messaging: foo.yunchee.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
BRUSSELS, Nov 4 (Reuters) - Bailed-out banks in Ireland and Germany posed a tough challenge for EU regulators seeking to ensure fair play because of the hefty state aid granted to the lenders, the EU's competition chief said on Thursday.
The European Commission is now scrutinising restructuring plans for Anglo Irish Bank, Allied Irish Bank and building society EBS while assessing extra capital for another building society INBS.
The competition regulator is also investigating German lenders WestLB, BayernLB and HSH Nordbank on their state support.
'Important decisions should be adopted in the coming months. Allow me to mention only two examples, which I consider the most difficult ones: Ireland and Germany,' EU Competition Commissioner Joaquin Almunia said in the text of a speech at an European Banking Federation event.
'In dealing with the Irish financial entities, the Commission needs to balance the necessity of addressing the distortions of competition caused by the large aid granted to Irish banks with any financial stability concerns that arise,' he said.
On the German cases, Almunia said the three banks needed a drastic overhaul and a new business model to ensure their viability.
He also said he would toughen EU rules for banks benefiting from state aid next year as part of a strategy to wean them off state support.
'As of 1st January, every bank in the EU requiring the support of a member state under the form of capital or impaired asset measures will have to submit a restructuring plan,' he said. They would also need to pay more for their revamp.
Under the current regime, only distressed banks or those receiving substantial aid need to show a restructuring plan.
Since the credit crisis broke in the autumn of 2008, the Commission has cleared state aid worth trillions of euros for a slew of bail-outs across the 27-country European Union.
(Reporting by Foo Yun Chee; Editing by Hans Peters) Keywords: EU BANKS/ALMUNIA (foo.yunchee@thomsonreuters.com; tel +32 2 287 6844; Reuters Messaging: foo.yunchee.reuters.com@reuters.net) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.