8.1 Introduction

This dissertation covers three areas of law: prudential regulations, State aid rules and the resolution framework. These areas of law are closely interlinked. If there are not sufficient capital instruments and eligible liabilities on its balance sheet, the resolution of a bank will be difficult to envisage without the use of public funding. As a result, there is a delicate interaction between the State aid regime for the banking sector and the resolution framework in regulating public funding of failing banks in the EU. The following threefold research question has been addressed in this dissertation in order to further understand this interaction:

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?

This research question has been assessed along three lines of research: (i) the impact of the resolution framework on the access to public funding for failing banks, (ii) the impact of the resolution framework on the exercise of State aid control by the Commission and (iii) the impact of the resolution framework on the restructuring process of a failing bank. The terms ‘public funding’ and ‘failing banks’ have been introduced in this dissertation as neutral terms without any special connotation under the resolution framework or the State aid regime for the banking sector.1

This chapter starts with a retrospective on Part 1 of this dissertation (section 8.2). Sections 8.3, 8.4 and 8.5 subsequently discuss the impact assessments that have been made with respect to the three research lines (Part 2 of this dissertation). Section 8.6 discusses potential actions to address the gaps that have been identified in the impact assessments. Section 8.7 contains some thoughts on the further development of the regulation of public funding within the European Banking Union. Section 8.8 reflects on the contribution of the resolution framework to solving the inadequacies revealed by the GFC.