If the European Commission decides that the two largest Irish banks must be reined in after receiving €3.5bn each in government funding, there is a myriad ways for the commission to cut them down to size, although the move is unlikely to do much for the national economy at this difficult juncture.

To give some sense of the market power AIB and Bank of Ireland still have, just consider their respective deposit bases. The entire deposit market of guaranteed Irish banks (including deposits in foreign jurisdictions) totals about €230bn, with AIB holding 36% of this and Bank of Ireland 37%. This is a combined deposit market share of over 72%. Anglo Irish has about 13% of the deposit market, bringing the combined market power of state-funded entities to 85%, and this does not include EBS and Irish Life & Permanent.

A strict interpretation of EU competition rules would probably mean that these banks would be restricted in some way, either via a ceiling on their total deposit rates or even a curb on their deposit offerings.

One way to remedy this apparent market power is to force AIB and Bank of Ireland to cede some of their branches or current accounts to other market participants – maybe the new third banking force, which has been long discussed in government circles.

A cap on balance sheet growth by AIB or Bank of Ireland cannot be ruled out, although Nama will shrink balance sheets anyway. There is also the possibility of a curb on lending, but again the banks are doing this naturally and any additional enforced curbs on credit could do serious damaged to economic prospects here.

The most likely outcome is that all three banks will be forced to suspend coupon payments on certain classes of subordinated bonds. The commission could also order these bonds to be redeemed early. Earlier this year, the banks all engaged in debt buybacks to generate some internal capital, but not all subordinated debt was included in these offers.

The final remedy possibly facing the banks is asset sales, which is what was asked of ING, the Dutch lender. AIB could be forced to sell its stake in M&T and its Polish business, while Bank of Ireland could be forced to dispense with Bristol & West and its joint venture with the British Post Office. This joint venture runs until 2020 and Bank of Ireland would hope to be compensated adequately for prematurely giving up what is effectively a state contract.