10.2.3.2 Guarantee schemes

In the context of a guarantee scheme, the Member States – as a general rule – commit to submit a restructuring plan to the Commission for any bank that causes the guarantee to be drawn.1 In other words: when a bank defaults on its liabilities and calls upon the guarantee, the Member State has to submit a restructuring plan for the bank in question.

With respect to guarantee schemes, there have been two important policy developments. Firstly, the DG Competition Staff Working Document of 30 April 2010 introduced the requirement to submit a viability review in case a new guarantee was granted when the total amount outstanding guaranteed liabilities exceeded both a ratio of 5% of total liabilities and the total amount of EUR 500 million.2 This viability review had to be submitted within 3 months from the granting of the guarantee.

Secondly, the 2013 Banking Communication introduced the requirement to submit a restructuring plan, in case a new guarantee is granted when the total amount outstanding guaranteed liabilities exceeds both a ratio of 5% of total liabilities and the total amount of EUR 500 million.3 This restructuring plan had to be submitted within 2 months form the granting of the guarantee. The Member States that decided to prolong their guarantee schemes had to take into account these new requirements. For instance, the notification of the eighth extension of the Polish bank guarantee scheme included the commitment to submit a restructuring plan within 2 months in case the two thresholds (of 5% and of EUR 500 million) were met.4