12.6.2 Has the Commission consistently taken into account these relevant characteristics?

In every bank State aid case, the Commission assesses whether the burden- sharing requirement is met. This assessment involves assessing whether one of the various types of burden-sharing is present; in other words: assessing if there is a LME, write-down, coupon ban or (in case of a split-up) a non-transfer of the debt instruments to the good bank. An overview of which bank State aid case is characterised by which form of burden-sharing is provided in the table in Annex IX.

It should be noted that there are some decisions in which it is not clearly recognised that a certain type of burden-sharing occurred: the decision on the Belgian bank KBC does not clearly mention whether KBC conducted a liability management exercise (LME). In the assessment of burden-sharing, the Commission noted that because of the coupon ban, “subordinated debt holders will receive limited remuneration and thus contribute to the restructuring”.1 This implies that the coupon ban is the only form of burden-sharing by subordinated debt holders. However, in the description-part of the decision, it was indicated that KBC “intends to buy, as it has already done in recent months, hybrids at below par value, thus generating a profit that boosts core capital”.2 This repurchase programme for hybrid loans corresponds to a LME. In the 2009 Annual Report of KBC, more information can be found on this repurchase programme for hybrid loans.3 Thus, KBC conducted a LME, but this was not explicitly taken into account by the Commission in its assessment of the burden-sharing by subordinated debt holders.

In addition, the various types of burden-sharing are not equally burdensome. This will be discussed in the following subsection.