EUROPEAN COMMISSION:THE EUROPEAN Commission's powerful competition division is set to hand down its ruling today on restructuring plans from the nationalised Anglo Irish Bank and the Irish Nationwide Building Society (INBS).
In decisions that will be a key test of the Government’s bank restructuring plan and may provide pointers for an assessment of proposals from Bank of Ireland and Allied Irish Banks (AIB), it will set out how the two institutions should be reconfigured in the light of the State aid they are receiving.
The commission declined to comment on its scrutiny of the plans from Anglo and INBS. Ahead of unveiling of the bank package last night by Minister for Finance Brian Lenihan, a commission spokesman said the Government’s proposals would not delay its examination of the restructuring plans for Irish institutions.
“We have been in close touch with the Irish authorities concerning the announcement they are due to make this evening and the commission’s review of the restructuring aid for various Irish banks continues apace,” the spokesman told reporters.
The commission – which keeps strict control over all State aid, merger and anti-trust decisions – approved the Nama scheme last month.
As officials are working within a rules-based system, their decisions in similar restructuring cases are likely to be echoed in their rulings on Anglo and INBS. In the case of the nationalised British lender Northern Rock, for example, the commission approved a restructuring package last October.
Inasmuch as it embraced a division of Northern Rock into a “good” and a “bad” bank, the plan bore a similarity to the restructuring proposal from Anglo.
In addition, regulatory derogations given to Northern Rock in Britain have essentially set precedents for some of the derogations enjoyed by Anglo.
The commission stressed when approving the Northern Rock restructuring plan that the aid package in the revised restructuring package from the British government be kept to a necessary minimum. This will be a crucial concern in Anglo’s case, given the bank’s demand for a fresh capital injection from the State of up to €9 billion.