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Andreas von Bonin, May 28, 2014
Since the start of the worldwide financial crisis in 2008, EU governments have used more than EUR 1.6 trillion to reduce the adverse effects of the shock on banks and financial institutions. Between October 400 decisions authorizing State aid measures for the financial sector. This included government guarantees as well as direct liquidity support in the forms of recapitalization and impaired-asset support. In response to the immediate crisis, the Commission’s efforts were set to reduce systemic risks and to increase the transparency of financial markets. EU State aid rules were used as an emergency tool to co-ordinate the responses of Member States and preserve a level playing field in the banking sector.
Following the collapse of Lehman Brothers in 2008, the Commission produced an emergency set of guidelines on measures to support banks during the crisis (“the Temporary Framework”). The Temporary Framework consisted of the following communications:
1.Communication on the application of State aid rules to measures taken in relation to financial institutions in the context of the current global financial crisis (“the Banking Communication”),
2.Communication on the recapitalization of financial institutions in the current financial crisis (“the Recapitalisation Communication”),
3.Communication from the Commission on the treatment of impaired assets in the Community banking sector (“the Impaired Assets Communication”), and
4.Communication on the return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules (“the Restructuring Communication”).