1.3 Research question

As discussed in the previous sections, the GFC has revealed certain inadequacies in the institutional and regulatory framework for the banking sector in the EU, which have sparked certain changes in this framework. The swift and thorough overhaul of the framework was an inevitable, but also critical operation. As a result, the institutional and regulatory framework for the banking sector has been improved, but at the same time it faces new challenges. The purpose of this dissertation is to discuss the challenges as a result of the co-existence of the resolution framework – in the form of the BRRD and SRMR – and the State aid regime for the banking sector. It describes how both the resolution framework and the State aid regime regulate public funding of failing banks in the EU after the onset of the GFC. It also then analyses how the resolution framework impacts the State aid regime for the banking sector. Finally, it assesses potential steps that can be taken to address the challenges in the co-existence of both regimes to contribute to an adequate and efficient institutional and regulatory framework for the banking sector in the EU. In this context, this dissertation aims to answer the following three-part research question:

How does the resolution framework impact the State aid regime for the banking sector? Which challenges can be identified in the co-existence of the resolution framework and State aid regime in regulating public funding of failing banks in the EU after the onset of the GFC? And which potential steps can be taken to address such challenges in order to contribute to an adequate and efficient institutional and regulatory framework for the banking sector?

The impact of the resolution framework on the State aid regime for the banking sector is assessed along three lines of research. The first line of research assesses the impact of the resolution framework on the access to public funding as a remedy for failing banks. The second line of research assesses the impact of the resolution framework on the exercise of State aid control by the Commission. The third line of research assesses the impact of the resolution framework on the restructuring process of a failing bank. Section 1.5 describes these lines of research in more detail.