6.6.3.2 State aid regime for the banking sector is outdated

The 2013 Banking Communication has not been updated since its introduction, which may give the impression that, as far as the EU is concerned, the crisis rages on and taxpayers can foot the bill when banks collapse.1 According to Mr Stiefmueller, a senior policy analyst at the independent watchdog Finance Watch in Brussels, this has, in the world of bank regulation, maintained two parallel universes: one where bank bailouts are frowned on as an abuse of taxpayers' money, and another where bank bailouts are considered as a politically more expedient and cheaper way of solving banking crises. He states that these two sets of rules are not compatible.2 Although the author does not concur with this view, it cannot be denied that the resolution framework has an impact on State aid control by the Commission, as described in this chapter. It has therefore become very challenging to fully comprehend State aid control by the Commission in the banking sector without knowledge of both the State aid regime for the banking sector and the resolution framework.

In a resolution of 16 January 2019, the European Parliament calls on the Commission to assess the recovery and resolution of banks in the light of State aid rules, to examine regulation in the light of the BRRD, and to propose transparent application of the rules on State aid in relation to the BRRD.3 In March 2019, the European Court of Auditors published information on an upcoming audit in respect of control of State aid to banks. This audit, inter alia, examines whether current State aid rules and the Commission’s procedures are fit for the purpose of identifying and controlling State aid to banks.4 In other words, steps are taken towards revision of the State aid regime for the banking sector, albeit the direction to be taken is still unclear, at the time of writing this dissertation.