The Veneto Banks Resolution: It Shall Be Called 'Liquidation'
European Company Law, Vol. 15, no. 5 (2018): 156–162
13 Pages Posted: 10 Apr 2019
Date Written: October 2, 2018
The establishment of Banking Union and the Single Resolution Mechanism has been arguably a success for the Eurozone. However, the enforcement of the new rules seems to meet significant challenges related to legacy problems that could make bank resolution economically and politically unfavourable for Member States. Italy and the two Veneto banks that were liquidated under national laws in June 2017 constitute such a case. This paper argues that this ‘orderly liquidation’ was, in essence, a hidden resolution, which raises logical legality concerns as to the actions ultimately taken by the European and national resolution authorities. The fact that public interest for resolution was not established by the Single Resolution Board, but was instead established by the Commission to provide liquidation aid on grounds of 107(3)(b) TFEU, combined with the reasoning of the Commission’s decision do not seem to conform with the bank resolution and state aid rules currently in place.
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