8.8.1 Why is this a relevant characteristic?

The previous section already provided some examples of behavioural constraints, such as the dividend ban and restrictions on the executive remuneration policy. Other examples of behavioural constraints are the acquisition ban, the advertising ban and the ban on aggressive commercial practices.

The presence of behavioural commitments1 forms a key element in the assessment of the proportionality. In the first place, behavioural constraints are relevant, because they serve as an exit incentive – as was explained in section 8.7. In the second place, behavioural constraints limit the distortions of competition. As a result of these behavioural constraints, the Commission finds the aid proportionate.

It should be pointed out that behavioural constraints are very important to the second stage of the compatibility-assessment (i.e. when the Commission assesses the restructuring plan). Many behavioural constraints apply during the entire restructuring period. However, the Commission welcomes the introduction of behavioural safeguards in the rescue phase, as is illustrated by the decision on the prolongation of the Polish bank recapitalisation scheme. In this decision, the Commission observed that the rescue phase can last long (sometimes as much as several years). From this perspective, it is – in the view of the Commission – important that the Member State introduces behavioural safeguards as early as possible.2

Bank support schemes usually include the following behavioural commitments: remuneration restrictions; coupon/dividend ban; advertising ban; balance sheet growth limitation. An overview of these behavioural constraints is provided in the table in Annex V. This table indicates for each bank support scheme which behavioural constraints are included in the scheme.

Since behavioural constraints are mainly important to the second stage of the compatibility-assessment, they will be discussed in chapters 11, 12 and 13. However, two behavioural constraints that were specifically taken into account in the assessment of the proportionality of a bank support scheme, will be discussed here; this concerns the balance sheet growth limitation (see subsection 8.8.2) and the ban on advertising (see subsection 8.8.3).