EU executive warns UK banks over bailout penalties

14 May 2012

Britain's part-state-owned banks should not take it for granted they will experience more lenient penalties for their bailouts, a senior European Union (EU) executive has warned.

Joaquin Almunia, competition commissioner at the body, has insisted that the Royal Bank of Scotland and the Lloyds Banking Group need to make sure they meet the regulatory requirements set out previously with regard to their repayments.

During an interview with the Financial Times, Mr Almunia explained that Brussels gave the UK a comparatively generous period of around four years to make their disposals.

Under the terms of the EU's plan, taxpayers will be repaid the funds used in the bailouts with competitive advantages being removed from state aid moving forward.

And Mr Almunia insisted he had "no fear" about these obligations being met on time.

"We know they are discussing how to implement these commitments but so far I have not received any sign that they can't comply with final deadlines," he added.

By Asim Shah

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