Non-Performing Loans and State Aid Rules

European Economy - Banks, Regulation, and the Real Sector, Issue 1, page 137-159, 2017

23 Pages Posted: 7 May 2020

See all articles by Christophe Galand

Christophe Galand

European Union - European Commission

Wouter Dutillieux

KU Leuven - Faculty of Business and Economics (FEB); European Union - European Commission

Emese Vallyon

European Union - European Commission

Date Written: July 1, 2017

Abstract

Impaired assets such as non-performing loans (“NPLs”) continue to pose significant problems across the EU. When possible solutions are being considered, “bad banks” or similar impaired asset relief measures are oſten discussed. However, if they involve support by the State such measures need to be compliant with a set of EU law provisions. This article aims to clarify which interventions are considered to be State aid, and to give an overview of the compatibility conditions that apply to State aid measures. A brief explanation is also given concerning the recent changes brought about by the EU’s new recovery and resolution framework introduced by the Banking Recovery and Resolution Directive (“BRRD”).

The authors are respectively Head of Unit, Case Handler, and Blue-Book Trainee at the European Commission’s Directorate-General for Competition’s Task Force Financial Crisis. They have written this contribution in a personal capacity. For this reason, the views expressed in this article are solely those of the authors and do not represent a position of the Directorate-General for Competition or the European Commission.

Keywords: Non-Performing Loans; NPLs; State Aid; EU Law

JEL Classification: K21; K33; G21; G28

Suggested Citation

Galand, Christophe and Dutillieux, Wouter and Vallyon, Emese, Non-Performing Loans and State Aid Rules (July 1, 2017). European Economy - Banks, Regulation, and the Real Sector, Issue 1, page 137-159, 2017, Available at SSRN: https://ssrn.com/abstract=3574633

Christophe Galand

European Union - European Commission ( email )

Rue de la Loi 200
Brussels, B-1049
Belgium

Wouter Dutillieux (Contact Author)

KU Leuven - Faculty of Business and Economics (FEB) ( email )

Naamsestraat 69
Leuven, B-3000
Belgium

European Union - European Commission ( email )

Rue de la Loi 200
Brussels, B-1049
Belgium

Emese Vallyon

European Union - European Commission ( email )

Rue de la Loi 200
Brussels, B-1049
Belgium

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