THE EUROPEAN Commission has sought further information on the wider Irish banking system to assist in its assessment of Anglo Irish Bank’s plan to restructure itself into a good and bad bank.

Anglo submitted a restructuring plan to Brussels for approval at the end of May and the bank met the commission “case team” with Department of Finance officials last Thursday to start talks on the viability plan.

The bank and department must secure approval from the commission for the restructuring under state aid rules as the Government is injecting up to €22 billion to keep the nationalised bank afloat.

While Brussels traditionally assesses restructuring plans based only on the viability of particular financial institutions, commission officials must also assess the impact of a wind-down of Anglo on the wider financial system.

The size of Anglo’s balance sheet relative to the wider banking system means that a closure of the bank could have a knock-on effect on the funding of other Irish financial institutions and the public finances given that the bank has been taken into State ownership.

Anglo’s balance sheet fell from €101 billion at September 2008 to €85 billion at the end of last year, out of an overall domestic banking system worth almost €400 billion.

Any short or medium-term wind-down of Anglo could also lead to a reduction in asset values across the Irish financial system.

Anglo has warned that a full wind-down would increase public debt and the Government’s ability to refinance and service existing debt. Anglo plans to create a good bank with loans of up to €15 billion out of total loans of €72 billion before the bank’s nationalisation.

Some €36 billion in Anglo loans will be sold to the National Asset Management Agency.

A spokesman for the department said talks were ongoing with the commission but had no comment on the nature of discussions. Anglo had no comment either.

Anglo has promoted and paid salary increases to five managers in the bank’s lending department.

The staff have been promoted to fill some of the 550 vacancies created by employees leaving under last year’s voluntary redundancy plan and other departures.

An Anglo spokeswoman said that while the bank was not lending to new customers, management roles had to be filled to oversee relationships with existing customers after staff left the bank or were moved to its Nama unit.

Anglo is also offering a €2,000 incentive payment to staff who recommend successful candidates for vacancies in a limited number of specialist roles that must be filled.