13.6.3.5 Other modalities: timeframe

The timeframe of the divestments is of importance. It is viewed positivelywhen the Member State can provide a detailed timeline for the planned divestments.1 This can be illustrated by the Opening Decision on BayernLB, in which the Commission noted that it had only been provided with target dates but with no firm commitments that the entities would be sold at the end of the restructuring period. The Commission therefore concluded that, at that stage, there was an uncertainty on the timing of the implementation of the compensatory measures, which shed doubts as to their effectiveness to mitigate distortions of competition.2

In the W-context, the timeframe of the downsizing is of great importance. A bank that is being wound-down will eventually exit the market, but not immediately. The duration of the winding-down period is therefore of importance.3 The timeframe of the balance sheet reduction has an impact on how long the competition distortions remain. A rapid balance sheet reduction is thus welcomed by the Commission. For instance, in the decision on the Slovenian Probanka (December 2013), the Commission noted that “more than half of the Bank’s balance sheet reduction will already occur by 31 December 2014”.4