EC unveils new bank rules

23 July 2009

The European Commission (EC) has published new guidelines that will force banks receiving government bailouts to prove they can be self-sufficient in future.

Under the rulings outlined today (July 23rd), financial institutions that receive state help may have to sell some assets and postpone acquisitions before their bailout requests are approved by the European Union (EU).

"We need to make banks viable again without state support and re-invigorate competition," an EU statement said.

So far, 70 banks across EU member states have received assistance following the onset of the economic turmoil.

Competition commissioner Neelie Kroes added that the process of restructuring European banks needs to begin, even though the economic crisis may have not yet passed.

The proposals are expected to come into force in December 2010.

In related news, the Walker Review recently outlined changes that should be made to the governance of banks in the UK.

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