International Business News
EU unveils bank restructuring 'guidelines'
The European Commission said on Thursday that it would take account of the financial crisis when assessing bank restructuring plans but warned that banks would have to make sacrifices.
The approach was outlined by the commission, which polices competition issues in the 27-nation European Union, in new "guidelines" explaining how it assesses state aid giving to the bloc's ailing banks.
It is based on three pillars: banks which receive help must be given a viable future without further support, aided banks must pay some of the restructuring costs, and measures must be taken to limit distortions of competition.
"We need to make banks viable again without state support and to re-invigorate competition," EU Competition Commissioner Neelie Kroes said.
The guidelines, which will be followed instead of normal rules until the end of 2010, come amid growing calls to clean up European bank balance sheets.
The European Central Bank warned last month that eurozone banks might have to take another 283 billion dollars (204 billion euros) in write-downs by the end of 2010, mainly to account for risky loans.