Selected Issues Raised by Bank Restructuring Plans under EU State Aid Rules

I. Introduction In the wake of the Lehman Brothers collapse and the subsequent financial crisis in October 2008, government interventions to rescue European banks have reached an unprecedented scale and put the European Union’s State aid control rules – as well as its Members States’ public finances – under considerable strain. Although each troubled financial institution faced specific issues, the causes and components of the financial crisis were systemic and well identified. They included an abundance of liquidity leading to ever riskier investments, the collapse of the subprime and asset-based securities system, considerable uncertainty on the value of impaired assets and the deg...