State aid for banks (Communication)

The Commission strengthens the liability principle by imposing creditor involvement ("bail in") as a condition for the approval of State aid and tackles deals the problem of "moral hazard" by tightening the conditions for recapitalisation and impaired asset measures and for government guarantees. The provisions on the approval of State aid are inferior per se to a basic ban on State aid - which would however require EU-wide rules on bank recovery and resolution.