8.4.1 Impact of the resolution framework

The State aid regime for the banking sector has not changed as a result of the introduction of the resolution framework. The Commission still assesses State aid awards to failing banks on the basis of the 2013 Banking Communication. This does not, however, mean that the resolution framework has not had its impact on the exercise of State aid control by the Commission.

With the introduction of the resolution framework, the role of the Commission as State aid authority has been extended to the assessment of supranational EPFS, namely the use of the SRF. The resolution framework provides for the analogue application of State aid control to the SRF. Moreover, the resolution framework regulates the relation between the SRB and the Commission, as a result of which the SRB has to comply with similar obligations as the Member States when the SRF is used. Similar provisions apply with respect to the ESM DRI on the basis of the ESM Treaty and the ESM DRI Guideline (section 6.2.1).

In addition, with the introduction of the resolution framework, the Commission has acquired the new role of co-resolution authority within the SRM. This entails that the assessment of the discretionary aspects of the resolution decisions taken by the SRB is exercised by the Commission (together with the Council). The Commission has also been empowered to adopt delegated acts to specify further criteria or conditions to be taken into account by the SRB in the exercise of its different powers. Moreover, as an observer of the SRB’s meetings, the Commission checks on an ongoing basis that the resolution scheme adopted by the SRB complies fully with the SRMR, balances appropriately the different objectives and interests at stake, respects the public interest and that the integrity of the internal market is preserved (section 6.2.2).

Lastly, the resolution framework has introduced the authority for the Commission to make an assessment when certain liabilities are excluded from the application of the bail-in tool under the BRRD or the SRMR. This is without prejudice against or for the assessment by the Commission under the State aid regime (section 6.2.3).

Since the introduction of the resolution framework, the Commission has to apply the State aid regime for the banking sector on aid granted in resolution (resolution aid). This term is not included in the 2013 Banking Communication. It is not clear how the concept of resolution aid fits within the concepts of rescue, restructuring and liquidation aid. It seems, based on an assessment of the decisions from the Commission, that resolution aid can take the form of all three types of aid (section 6.3.1).

As a result of the fact that the 2013 Banking Communication does not include the concept of resolution aid, it is not clear which framework applies to the assessment by the Commission of this aid. Chapter 6 discusses the elements that can be established based on the Commission’s decision practice with respect to the assessment by the Commission of resolution aid when notified by a Member State that it intends to grant resolution aid, both on an ad hoc basis and under a resolution aid scheme (sections 6.4.1 to 6.4.6).

In addition, the Commission has to assess State aid granted in the banking sector, not only on compatibility with the internal market, but also on compliance with intrinsically linked provisions of the resolution framework. This obligation of the Commission is in line with the jurisprudence of the EU Courts. It is not indicated in the resolution framework which provisions qualify as ‘intrinsically linked’ (section 6.3.2). 1 It can be read in the decisions taken by the Commission that it has considered a number of provisions to be intrinsically linked provisions, depending on the specifics of the resolution aid measure. In all of its decisions, the Commission assessed that these intrinsically linked provisions were not violated by the proposed aid measures without going into much detail (section 6.4.7).

State aid can also still be granted outside of resolution, in the form of precautionary guarantees, precautionary recapitalisation and liquidation aid. The Commission’s decisions assessing precautionary guarantees and precautionary recapitalisation show that the access criteria set with respect thereto under the resolution framework are considered by the Commission to qualify as intrinsically linked provisions of the resolution framework. Liquidation aid is granted outside the scope of the resolution framework, as a result of which there are no intrinsically linked provisions of the resolution framework that impact the assessment of liquidation aid under the State aid regime for the banking sector. One exemption in that respect is that winding up in normal insolvency proceedings is only possible if resolution is not in the public interest (section 6.5).