Online bank ING Direct to be sold
Steve Chiotakis: Meanwhile, one European bank is being forced to get smaller to avoid being bailed out again. One of the biggest online banks here in the U.S. — ING Direct — is expected to be sold off today by its Dutch parent. Leading contenders reportedly include Capital One and General Electric.
Here’s Marketplace Senior Business Correspondent Bob Moon.
Bob Moon: The Amsterdam-based banking and insurance giant is essentially under orders to get smaller. That was a condition for the bailout it got from the Dutch government. Under pressure from the European Commission, it’s agreed to sell off assets representing 45 percent of its balance sheet, and that includes its online-banking business here in the U.S.
Bart Narter: What the European regulator was saying is, sell off some of your non-core, non-European businesses to generate cash, so we don’t have to bail you out as much.
Bart Narter is a banking industry analyst at Celent. He says European regulators were able to push for the bank to downsize by selling overseas assets. But here in the U.S., there were no such conditions. In fact, too-big-to-fail banks were encouraged to merge.
Narter: The reason that banks got bigger in the U.S. is, when there was a troubled institution, you needed an even larger, healthier institution to buy it out and bring up capital reserves.
Thus the takeovers of such banks as Wachovia and Washington Mutual. Presuming an American company buys ING Direct, yet another U.S. financial institution will be getting bigger.
I’m Bob Moon for Marketplace.
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