State aid for banks (Communication)
The Communication sets out the up-dated EU crisis rules for state aid to banks during the crisis from 1st August 2013. It replaces the 2008 Banking Communication and supplements the remaining crisis rules. Together, they define the common EU conditions under which Member States can support banks with funding guarantees, recapitalisations or asset relief and the requirements for a restructuring plan.
The Commission strengthens the liability principle by imposing creditor involvement ("bail in") as a condition for the approval of State aid and tackles deals the problem of "moral hazard" by tightening the conditions for recapitalisation and impaired asset measures and for government guarantees. The provisions on the approval of State aid are inferior per se to a basic ban on State aid - which would however require EU-wide rules on bank recovery and resolution.