12.5.3.7 Consistent application of the burden-sharing principle?

The principle of equal treatment requires that the burden-sharing principle should be applied consistently. If the Commission accepts in one case a lower level of burden-sharing than in other cases, then this amounts to an inconsistency (provided there is no justification for the lower level of burden-sharing). This raises the following questions: Firstly, does the Commission require a minimum level of burden-sharing? Secondly, can the same level of burden-sharing be attained by the different types of burden-sharing? And thirdly, can a lower level of burden-sharing be justified?

As regards the first question, it should be recalled that the 2013 Banking Communication requires full burden-sharing by shareholders. In the period before the adoption of this Communication, there were no ex ante thresholds for burden-sharing. Nevertheless, the Commission required that burden-sharing was ‘appropriate’.1 In some decisions, the Commission speaks of ‘proper’ burden-sharing.2

As regards the second question, it should be noted that the exact level of burden- sharing depends on the modalities of the burden-sharing measures. In that regard, the previous subsections have shown that a nationalisation without any compensation, a complete (or almost complete) dilution or remaining at the bank in liquidation are equivalent to each other in terms of how burdensome these burden-sharing measures are.

As regards the third question, it should be pointed out that there can be a justification for the limited burden-sharing. For instance, in the case of First Investment Bank (FIB), there was – apart from a dividend ban – no burden- sharing by shareholders. This was justified by the fact that FIB did not have a capital shortfall.3 FIB only benefited from liquidity support.

Another case is the case of Crédit Immobilier de France (CIF). The Commission explicitly held that CIF constituted a special case (“un cas bien particulier”). CIF was dependent on wholesale financing. Due to a downgrade, CIF experienced significant refinancing problems. Nevertheless, CIF was still a solvent institution when it was liquidated in 2013.4 This justified a moderation of the burden-sharing principle (“eu é gard à cette particularit é du CIF, il convient de temp é rer exceptionnellement le principe d’une contribution propre des actionnaires”).5

The justification of the limited burden-sharing means that the limited burden-sharing in some cases does not amount to an inconstant application of the burden-sharing principle. However, no justification can be found in the decisions on KBC, FIH and Liberbank.