10.2.5 Concluding remarks

Following the First Prolongation Communication, every bank which benefited from a new recapitalisation or an impaired asset measure has to submit a restructuring plan. Thus, the question whether a restructuring plan is needed no longer depends on whether the bank is fundamentally sound or distressed. From that perspective, it could be argued that the fact that the beneficiary bank is fundamentally sound has lost its relevance. However, the fact that the beneficiary bank is (or is not) fundamentally sound is still a relevant characteristic. While it is true that the characteristic is no longer relevant to the requirement to submit a restructuring plan, it can still be relevant to the question how much restructuring is needed. A bank that is not fundamentally sound most likely needs more far-reaching restructuring measures to return to viability than a sound bank. The assessment of the degree of restructuring required (and the characteristics that are relevant to that assessment) are discussed in the following sections.