9.8 Burden-sharing and remuneration

In the Commission decisions, ‘burden-sharing’ and ‘remuneration’ are often bracketed together. This would suggest that burden-sharing is only achieved by means of a correct remuneration. However, it should be pointed out that burden-sharing is also related to other compatibility-criteria. This follows from point 21 of the IAC, according to which banks should “bear the losses associated with impaired assets to the maximum extent”. Point 21 requires ex ante transparency and disclosure, followed by the correct valuation of assets prior to government intervention and a correct remuneration of the State for the asset relief measure. Burden-sharing is thus related to the following three criteria: i) transparency and disclosure, ii) valuation, and iii) remuneration.