Public funding of failing banks in the European Union (LBF vol. 19) 2020/7.3.1.3:7.3.1.3 A combination of competences

Public funding of failing banks in the European Union (LBF vol. 19) 2020/7.3.1.3

7.3.1.3 A combination of competences

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Table 13 summarises the competences of the different authorities involved in restructuring under the State aid regime for the banking sector and the resolution framework. The term competent authority and resolution authority both cover the ECB/SRB and the national competent and resolution authorities, unless indicated otherwise.

Table 13: Overlapping of competences

Bank / Member State

Competent authority

Resolution authority

Commission

Ex ante restructuring

Restructuring on basis of the recovery plan

The recovery plan is drawn up by the bank.

The recovery plan is assessed by the competent authority. The competent authority may as an ultimum remedium direct the bank to take any measures it considers necessary and proportionate.

The resolution authority may examine the recovery plan with a view to identifying any actions in the recovery plan which may adversely impact the resolvability of the bank and make recommendations to the competent authority with regard to those matters.

Restructuring on the basis of the resolution plan

The bank provides input for the resolution plan.

The resolution authority consults the competent authority.451

The resolution plan is drawn up by the resolution authority. Where the resolution authority assesses in the resolvability assessment that there are substantive impediments to the resolvability of a bank, it shall request the bank to propose possible measures. If these do not effectively reduce or remove the impediments, the resolution authority has to require the bank to take alternative measures (where applicable, on the instruction of the SRB).

Ex post restructuring

Business reorganisation plan

The business reorganisation plan is drawn up by the bank.

The business reorganisation plan is assessed by the competent authority and the resolution authority.

The resolution authority approves the business reorganisation plan (where applicable, with the endorsement of the SRB).

Restructuring plan

The restructuring plan is drawn up by the Member State that intends to award restructuring aid. The bank is normally (informally) involved in the preparation of the restructuring plan.

The restructuring plan is approved by the Commission.

Capital raising plan

The capital raising plan is drawn up by the Member State that intends to award the aid in cooperation with the bank.

The capital raising plan is assessed in close collaboration with the competent authority.2

The capital raising plan is approved by the Commission.

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