BRUSSELS (AP) — The European Union's competition watchdog on Monday criticized the restructuring plan submitted by German authorities for bailed out public-sector bank BayernLB.
The draft plan for BayernLB from the Bavarian government "fails to convince me," the EU's Competition Commissioner Joaquin Almunia said.
He said the plan doesn't show a viable business model for BayernLB in the medium or long-term and doesn't sufficiently address the distortion to competition created by the billions of euros of aid the bank received.
BayernLB declined to comment and the Bavarian finance ministry didn't immediately respond to requests for comment.
BayernLB received some euro10 billion in capital support from the state of Bavaria in 2008 and 2009, after massive real-estate loans made by its Austrian unit went sour. It is one of several German Landesbanken, public sector banks partially owned by their state governments and local savings banks, that had to be bailed out after the collapse of Lehman Brothers.
Almunia's comments came as he approved the restructuring plan for Hypo Real Estate, Germany's most prominent credit-crunch casualty and not a Landesbank. That reorganization leaves the bank as a shadow of its former self, with a balance sheet 85 percent smaller than in 2008.
The Commissioner said the restructuring plans for two other Landesbanken, HSH Nordbank and WestLB, were close to being approved.
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