7.5.2.4 Loss of transparency in restructuring

Although the restructuring process under the State aid regime is a political game not transparent to outsiders, the (non-confidential) versions of the decisions from the Commission in relation to State aid awards are published.1 In addition, the commitments by the Member States in relation to the restructuring process are published as annexes to these decisions. In this way, it is possible to get a certain insight in the restructuring that the beneficiary bank is subject to. This may be helpful for third parties confronted with such restructuring process (e.g., shareholders of which shares are written down).

Under the resolution framework, transparency of the restructuring process seems to have lost ground.2 It can be read in Recital (86) BRRD that the fact that information on the contents and details of recovery and resolution plans and the result of any assessment of these plans may have far-reaching effects, in particular on the undertakings concerned, must be taken into account. Any information provided in respect of a decision before it is taken, be it on whether the conditions for resolution are satisfied, on the use of a specific tool, or of any action during the proceedings, must be presumed to have effects on the public and private interests concerned by the action.

However, information that the resolution authority is examining a specific institution could be enough for there to be negative effects on that institution. It is therefore necessary to ensure that there are appropriate mechanisms for maintaining the confidentiality of information, such as the content and details of recovery and resolution plans and the result of any assessment carried out in that context. The contents of recovery and resolution plans are therefore not publicly available. Furthermore, the business reorganisation plan is not publicly available.

As a result, the restructuring process of a bank put in resolution without the use of EPFS is less transparent than that of a bank put in resolution with the use of State aid. In the latter case, the Commission has to publish (the non-confidential version of) its decision in respect of the award of restructuring aid and the commitments of the Member State in respect of the restructuring of the bank.3 Taking into account that also the recovery and resolution plans of banks are not published, it would contribute to the understanding and acceptance of the resolution of a bank, if a (non-confidential version of the) business reorganisation plan is made publicly available (in so far this does not impede financial stability).4