A PYMNTS Company

Relieving Banks from Toxic or Impaired Assets: The EU State Aid Policy Framework

By  |  November 15, 2012

Posted by D. Daniel Sokol

Yassine Boudghene (DG Comp) and Stan Maes (Leiden) discuss Relieving Banks from Toxic or Impaired Assets: The EU State Aid Policy Framework.

ABSTRACT: The financial crisis has demonstrated that banks may end up holding toxic or impaired assets that harm their perceived solvency and liquidity. To address that difficulty, the European Commission has issued policy guidelines defining to what extent such banks can be relieved from impaired assets under the rules on State aids. An important question in that regard is the assessment of whether any assistance from governments may distort competition between financial institutions.