8.8.4 Synopsis

Overall, it is the author’s view that the introduction of the resolution framework did contribute to solving the inadequacies revealed by the GFC. There are still, however, significant flaws in that respect. Further alignment of the State aid regime for the banking sector and the resolution framework will be a valuable step in creating a sound, integrated framework for regulating public funding of failing banks in the EU. This requires a true understanding of both the resolution framework and the State aid regime for the banking sector, so as to see how they can further complement each other, instead of contradicting or duplicating each other. That being said, the output that can be expected from such an enhanced framework for public funding of failing banks cannot be seen separately from the political stakes that are at risk. The author’s original thought was that the resolution framework would lead to a system that would be more objective, more transparent and less political, which would be an improvement compared to the State aid regime.1 Studying the resolution framework, however, shows that there still is plenty of room for political considerations. This not only concerns political decisions at Member State level, but also policy choices at the level of the European institutions involved. Rather than denying that resolution involves political decisions, the author believes it would be better if discretion in dealing with political stakes is catered for and made more transparent in the resolution framework.2 This will not only contribute to the credibility of the resolution framework, but also to the democratic accountability.3