State aid for financial institutions—the Impaired Assets Communication
State aid for financial institutions—the Impaired Assets Communication

The following Restructuring & Insolvency practice note provides comprehensive and up to date legal information covering:

  • State aid for financial institutions—the Impaired Assets Communication
  • CORONAVIRUS (COVID-19)
  • The Crisis Communications
  • Need for a restructuring plan
  • Rationale for impaired asset relief
  • Types of impaired asset relief
  • Which assets are covered?
  • Commission's guidelines on impaired asset relief
  • Valuation and pricing
  • Commission's approach to impaired asset relief

CORONAVIRUS (COVID-19)

This content is affected by the coronavirus (COVID-19) pandemic. For further details, take a look at our Coronavirus (COVID-19) toolkit. For related news, guidance and other resources to assist practitioners working on restructuring and insolvency matters, see: Coronavirus (COVID-19)—Restructuring & Insolvency—overview.

The Crisis Communications

The Impaired Assets Communication is one of the suite of Crisis Communications from the European Commission (the Commission) setting out the requirements for aid to be compatible with State aid principles:

  1. the 2013 Banking Communication (which replaces the 2008 Banking Communication)

  2. the Recapitalisation Communication

  3. the Impaired Assets Communication

  4. the Restructuring Communication

  5. the 2010 Prolongation Communication

  6. the 2011 Prolongation Communication

These special rules were introduced under article 107(3)(b) of the Treaty on the Functioning of The European Union (TFEU), which allows the Commission to approve state support to remedy a serious disturbance in the economy of a Member State. These rules have been updated where necessary to adapt to the evolution of the crisis.

The Impaired Assets Communication is effective from 25 February 2009 and was extended beyond 31 December 2011 under the 2011 Prolongation Communication on the basis that the conditions under art 107(3)(b) of the TFEU, still applied (ie a serious disturbance in the economy of the Member State).

Need for a restructuring plan

Impaired asset measures are usually of a permanent nature and can’t be easily undone, so there is

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