The EACB welcomes the European Commission’s initiative to review the State Aid framework for the financial sector. With the establishment and implementation of the Crisis Management and Deposit Insurance (CMDI) framework, the regulatory landscape has shifted significantly. State Aid rules, and specifically the 2013 Banking Communication, must now be revised to align with this new reality. We stress the broader role of Deposit Guarantee Schemes (DGSs) in crisis management. The Schemes can support preventive and alternative measures to ensure cost-effective outcomes and preserve financial stability.
We calls on the Commission to:
- Replace the 2013 Banking Communication with a new framework that is fully harmonised with the CMDI review.
- Explicitly acknowledge that preventive and alternative DGS measures are legitimate, non-distortive tools when they follow the Least Cost Test. These should generally not be considered "State Aid".
- Ensure that State Aid rules, where applicable, do not override the sectoral expertise of resolution authorities and DGSs regarding the most efficient way to handle a failing bank.