Bankar og endurskipulagning fyrirtækja – stefnumörkun

Samkeppniseftirlitið birtir drög að stefnumörkun og leitar sjónarmiða

It is in the interests of consumers and business that banks write off or reduce the debts of viable companies experiencing payment difficulties. However, banks must make a clear profitability requirement of restructured companies and take competition considerations into account.

This is set out, among other things, in a discussion paper on banks and the financial restructuring of companies, which the Competition Authority is publishing today. The Authority is seeking comments from stakeholders and the public on the policy framework set out in the paper.

The discussion paper addresses the debt problem of Icelandic companies and the related competitive issues. This is a highly important subject and can have a significant impact on the development and growth of Icelandic business life.

The Competition Authority sets out, in 17 numbered points, the core considerations it believes should be guiding the restructuring of businesses. Lessons are drawn from the experience of other countries with similar issues. Furthermore, an overview is provided of how the aforementioned participation of banks in competitive markets is viewed under competition law, how state aid rules relate to the matter, and how such cases have been handled to date.

The discussion paper is intended, among other things, to highlight the importance of putting the interests of consumers and society in active competition first, ahead of the vested interests of specific companies. The public debate on corporate restructuring has focused almost exclusively on the position of individual companies that now face competition from financially restructured firms. Their perspectives are certainly important when a restructuring takes place, but they must not be dominant. In particular, the interests of society and consumers in effective competition must be taken into account.

Among the 17 core perspectives set out in the document (Chapter 2), the following may be mentioned:

• Assistance should only be provided to companies with sound operational prospects; however, it must be avoided to revive or keep unprofitable companies in operation.
• It is in the interests of consumers and business that banks write off debts or otherwise reduce the debt burden of viable companies. The application of competition law should not work against this.
• Banks must make a clear return on equity requirement for restructured companies and ensure the strictest discipline on profitability.
• The risk that a heavy corporate debt burden will be passed on to consumers in the form of higher prices must be reduced.
• ankar eiga að selja endurskipulögð fyrirtæki við svo fljótt sem auðið er í gagnsæju ferli, eftir því sem kostur er. Skráning í kauphöll er vænlegur kostur.
• The Competition Act provides sufficient protection, except that it lacks the powers to break up companies.

Áherslur við endurskipulagningu fyrirtækja skipta sköpum við endurreisnina.
A large proportion of companies in many industries are in a precarious position. It is therefore important to tackle problems of this kind decisively. The experience of other countries from previous crises can be utilised. The report outlines the different responses of Asian nations to the crisis situation over the last decade. The experience of South Korea should be looked to, but the methods applied in Japan, which had poor consequences for economic recovery, should be avoided, see chapter 3 of the report for further details.

The Competition Authority requests that views and comments on the discussion paper be submitted no later than 8 January.
The discussion paper is sent to numerous parties for comment, and in addition, all interested parties are given the opportunity to submit their views. The Authority will subsequently process the comments received, and will, for example, forward them to banks and the government, thereby contributing to clear policy-making for the restructuring of companies for the benefit of the public and the business community. The discussion paper may lead to changes to the Competition Authority's Opinion No. 3/2008, 'Decisions by banks and the government on the future of companies in competitive markets', and otherwise affect the application of competition law.

Further information is provided by Páll Gunnar Pálsson, Director-General of the Competition Authority.