EU decision on support for banks due November

(CERNOBBIO) - Brussels will say in November if it is to extend support for troubled European banks, but will move more quickly on the troubled Anglo Irish Bank, the EU's competition commissioner said Saturday.

"We are now starting the analysis on what to do beyond the 31st of December," regarding extending the support scheme for banks, Joaquin Almunia told reporters at economic forum in Cernobbio, northern Italy.

"In November maybe we will communicate what will be the treatment of public recapitalisation or treatment of impaired assets with public resources in 2011," he added.

"We will need to discuss how to adapt these exceptional regimes to the new circumstances."

In June, the Commission extended plans to support banks in the member states hit by the economic crisis until the end of the year, provided the countries concerned also contributed.

On the question of a further two-billion-euro payment (2.57 billion dollars) to Ireland's struggling Anglo Irish Bank, Almunia said: "I will be in a position to communicate publicly a decision in the coming weeks."

On Tuesday, the bank reported a pre-tax loss of 8.2 billion euros (10.4 billion dollars) in the six months to the end of June -- the biggest first-half loss in Irish corporate history.

Hit by soaring bad debt and a weak economy, the bank was nationalised by the Irish government in early 2009, which has since injected a total of 22.88 billion euros to keep it afloat.

Earlier this week, Irish Prime Minister Brian Cowen said winding up the bank immediately could cost more than 70 billion euros and that this would not be in the interests of the taxpayer.

But on Saturday, Ireland's Innovation Minister Conor Lenihan, brother of Finance Minister Brian Lenihan, said the bank would be decommissioned, though he said it would be "costly and dangerous" to do so too quickly.

Brian Lenihan was due to meet Almunia in Brussels next week to discuss a possible bail-out for the bank, the Irish Times reported Saturday.

Anglo Irish, like many rival banks, was ravaged by the global financial crisis and a deep recession, alongside the property market meltdown, resulting in billions of euros of bad debts -- or loans that have to be written off.

On Thursday, the ECB extended easy facilities for banks in the Eurozone to access funding, amid signs of renewed tension in financial markets.

Although European banks have undergone stress tests to see if they would withstand a fresh major financial shock or widespread loan defaults, there has been growing concern that parts of the system remain under strain.