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Assessing the European Banking Sector Bailout Plans

Authors :
Nol Amenc

Professor of Finance and Director of the EDHEC Risk and Asset Management Research Centre

Samuel Sender
Applied Research Manager at the EDHEC Risk and Asset Management Research Centre

In response to a major financial crisis, European governments have put in place measures for the recapitalisation of the banking sector and the shoring up of its liquidity.

These bailout plans pose problems for the European Union, founded as it is on the  resumption of market competition not distorted by intervention on the part of its member states. So, even in emergencies, the transactions realised as part of these bailout plans must, to conform to market principles and the European Commission directives on competition, be realised at market prices. In other words, support is permissible, but subsidies are not.
Type :
Position Paper
Dates :
Created on December 4, 2008
Further information :
For more information, please contact Sverine Anjubault, EDHEC Research and Development Department [ severine.anjubault@edhec.edu ]

The contents of this paper do not necessarily reflect the opinions of EDHEC Business School.

Finance


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