I have not been asked this question directly before now but I have alluded to this matter on many occasions – long before there was any mention of the possibility of a merger by the chief executive of the Bank of Ireland, as he has been referred to recently. There are a number of hurdles that must be crossed before any such merger could take place. If the proposal includes a significant cross-border element the European Commission must be notified by the parties. The Commission will make the substantive decision, taking competition law into consideration, or refer the matter back to the national authorities. It is requested that the national authorities consult the Commission and it seems certain that any proposed merger of AIB and Bank of Ireland would be notified to the Commission.
Apart from this, the Minister for Enterprise, Trade and Employment must also be notified and take decisions on mergers. In practice she consults the Competition Authority. There is an exemption for banking business at present, but most large banks engage in a wide range of other activities, such as insurance, and a merger may be referred to the Competition Authority on such grounds. This exemption will shortly be removed under the recently passed Competition Act. The Minister for Finance must approve mergers which involve more than 20% of banking assets in the State, so a merger between Bank of Ireland and Allied Irish Banks would have to be judged by the Minister on the basis of his view of the common good. It is not legally clear if a Minister could block a merger on competition grounds if it had been approved by the commission.