8.8.3 Ban on advertising

Banks may not use State aid to expand their activities. Therefore, as a general rule, beneficiaries of State aid are prohibited from advertising referring to the State aid. This behavioural constraint can be found in many cases.

In most cases, the ban on advertising is a straightforward prohibition. There is one case, however, that contains a more nuanced restriction: one of the commitments of the Bulgarian scheme (which provided liquidity support to Bulgarian banks) was a ban on advertising. The commitment was specified as follows: “to impose a ban on advertising referring to State support by the beneficiaries of the scheme for the purpose of acquiring new clients and businesses and to prevent them from employing any aggressive commercial strategies which would not take place without the support of the scheme”.1 This is not a complete ban on advertising, since it is limited to advertising ‘for the purpose of acquiring new clients and businesses’. The limited scope of the advertising ban was justified by the circumstances on the Bulgarian financial markets. Apparently, there was a risk of a bank run. Banks therefore needed to reassure their depositors. This particular situation justified the narrower scope of the behavioural constraint.