November 30
2020
Anjum Shabbir
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20th November 2020
Banking & Finance Competition & State Aid

State aid: Commission approves liquidation scheme for small Italian banks

The European Commission has authorised, under EU State aid rules, an Italian liquidation scheme for small banks with total assets of less than 5 billion euros, for a period of 12 months from today.

The scheme applies for failing banks that are considered to be eligible, and where resolution of those banks was not in the public interest. This approval means the Italian State can support the sale of assets and liabilities of a failed bank to another bank.

The Commission found that the Italian measure is in line with the conditions set out in the 2013 Banking Communication for orderly liquidation schemes for small banks, with the exception of the  3 billion-euro balance sheet threshold. However, given the exceptional circumstances linked to the coronavirus outbreak and the safeguards against undue competition distortions that Italy has included in the scheme, the Commission has accepted the higher threshold of 5 billion euros.

Importantly, the Commission has announced it will also temporarily accept that higher thresholds for similar schemes are applied by other Member States in the context of the coronavirus outbreak, as long as similar safeguards to those implemented by Italy can be demonstrated.

The case number is SA.57516.

Read the Commission’s press release for more information.

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