8.2.2 Concluding remarks

Documentgegevens:

mr. drs. R.E. van Lambalgen, datum 01-12-2017

Datum: 01-12-2017
Auteur: mr. drs. R.E. van Lambalgen
JCDI: JCDI:ADS588229:1
Vakgebied(en): Financieel recht / Europees financieel recht
Mededingingsrecht / EU-mededingingsrecht

In the context of this PhD-study, the main question is: has the Commission consistently applied this relevant characteristic? The answer to this question depends on the view that one takes on the systemic relevance of banks. If one takes the view that all banks have systemic relevance, then the observation that the Commission has consistently held that the beneficiary bank has systemic relevance, means that there is no inconsistency. By contrast, if one takes the view that some banks are systemically important while others are not, then the approach of the Commission amounts to an inconsistency.

In the literature, differing viewpoints can be found. For instance, Waldbauer criticises the Commission for attributing systemic importance to almost every European bank.1 Gandrud & Hallerberg argue that some banks are rescued not because they are systemically important financial institutions (SIFI’s), but because they are politically important financial institutions.2

Honohan recognises that systemic importance depends on the current market conditions. He argues that in normal times, small banks may be allowed to fail, while in times of heightened risk aversion and uncertainty, such banks may be candidate for a bailout.3 A report to the G-20 also stresses that the assessment of systemic importance is likely to be time-varying depending on the economic environment.4

In that regard, it should be pointed out that the assessment whether a bank has systemic importance is not only made by the Commission. Indeed, this assessment also takes place at the national level. Member States that consider to rescue ‘their’ banks will usually determine whether the rescue is necessary for the stability of the financial sector. In other words: they will assess whether the failing bank has systemic importance.5 It is only after the granting of State aid by the Member State that the Commission assesses whether the beneficiary bank has systemic importance.

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Waldbauer 2014, p. 512-513.

C. Gandrud & M. Hallerberg, ‘Not SIFIs but PIFIs’, blog post Bruegel, March 2015.

Honohan 2010, p. 130.

Report prepared by staff of IMF, BIS and FSB, ‘Guidance to Assess the Systemic Importance of Financial Institutions, Markets and Instruments: Initial Considerations’, October 2009, p. 7.

This raises the following question: which banks were not considered to be systemically relevant and thus allowed to fail? It should be noted that – in contrast to the US where the Federal Deposit Insurance Corporation (FDIC) publishes a list of bank failures – there is no clear list of bank failures in the EU.In the Netherlands, DSB Bank was not rescued by the State. In Germany, there were 3 banks that were allowed to fail: Weserbank, Noa Bank and FXdirect Bank. These three banks were mentioned in: Deo et al. 2015, p. 168. Another example of a bank that was allowed to fail was Heta Asset Resolution (a case which is ‘famous’ for being the first case in which a bank was put into resolution under the BRRD).In the literature, it has been pointed out that in the US much more banks were allowed to fail. For instance, in the period 2008 – July 2013, there were 494 banks that failed.