STATE AID FOR THE BANKING SYSTEM: POST-CRISIS REFLECTIONS REGARDING FINANCIAL FREEDOM AND HUMAN DIGNITY
STATE AID FOR THE BANKING SYSTEM: POST-CRISIS REFLECTIONS REGARDING FINANCIAL FREEDOM AND HUMAN DIGNITY

Summary/Abstract: The state aid policy was a main tool for acheivieng macro- stability after the crisis for the EU banking system. However, our paper’s objective is to show that more reforms are needed in order to better assure the preservation of property rights for those who are keeping their money in the banks subjected to state aid and recapitalisation, because human dignity and human security are indisputable linked with financial security. Presently it is commonly accepted that the occurrence of the global economic crisis reshaped the EU state aid policy and, as a consequence, immediately after 2008 a series of special regulations concerning measures and schemes granted for stabilizing the financial and banking sector have been adopted. One of these regulations was the BRRD Directive (Bank Recovery and Resolution Directive) which allowed the creation of a common European framework regarding the tools for bailout in the European banking system in order to ensure business continuity of banks, credit institutions and investment firms. If before BRRD adoption the Member States have granted several State aids for rescue and restructuring in the banking sector, after its enforcement a number of restrictive conditions had to be met for such aid to be granted while minimizing the risks of competition distortion and the costs for taxpayers. Based on these realities, this paper discusses the implications of BRRD adoptions and of state aid granted for the stability of the European banking sector, for the financial freedom and for the human dignity in the EU.

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