EU: Probe into ‘deferred tax assets’ of southern Europe’s banks considered

The European Commission is considering an investigation into whether Greece, Italy, Portugal and Spain have illegally underwritten banks which have accumulated assets considered low-quality in the rest of the euro zone, the Financial Times reported.

The EC is currently studying the information requested from member states to decide if a full probe is required, the FT said, and a “conversation” was in progress between the member states and competition regulators in Brussels, according to people familiar with the matter.

Overall, the four countries hold more than 40 billion euros in “deferred tax assets” – or bank losses that are offset against tax bills and insured by the government – according to ECB data published last year, the paper said.

In addition, another EU authority called the European Banking Authority (EBA) has started looking into whether deferred tax assets create an uneven playing field, the FT reported.

Full Content: The Financial Times

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