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State aid after the Banking Union: serious disturbance and public interest

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  • Phedon Nicolaides

    (University of Maastricht)

Abstract

An objective of the European Union’s Banking Union is to prevent Member States from having to subsidise banks. The Single Resolution Mechanism may have limited but has not eliminated state aid to banks. This is shown by the relevant statistics, the number of positive Commission decisions and the provisions of the Single Resolution Mechanism Regulation. State aid is allowed in three situations: when a bank is resolved, when it is liquidated and when it is solvent but needs temporary liquidity or more capital. This article identifies a difference between the European Commission and the Single Resolution Board in the interpretation of the concept of “public interest”. The article further argues that this difference may not contradict the objectives of the Banking Union if state aid is still necessary to prevent damage to regional economies.

Suggested Citation

  • Phedon Nicolaides, 2022. "State aid after the Banking Union: serious disturbance and public interest," Journal of Banking Regulation, Palgrave Macmillan, vol. 23(1), pages 79-90, March.
    • Handle: RePEc:pal:jbkreg:v:23:y:2022:i:1:d:10.1057_s41261-021-00173-1
    DOI: 10.1057/s41261-021-00173-1
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