The Commission announced, on 23 July 2009, a Communication explaining its approach to assessing restructuring aid given by Member States to banks. This approach is based on the following three fundamental principles: i) aided banks must be made viable in the long term without further state support, ii) aided banks and their owners must carry a fair burden of the restructuring costs and iii) measures must be taken to limit distortions of competition in the Single Market.

The Communication, which is temporary and is in force until 31 December 2010, explains how the Commission intends to apply these principles in the current financial crisis, with a view to contributing to a return to viability of the European banking sector. It emphasises that in order to devise strategies for a sustainable future, banks will have to stress test their business. This will involve, amongst other things, reviewing the Restructuring Plan and business model of the bank and highlighting the banks strengths and weaknesses.

The Communication also makes it clear that aided banks and their capital holders/investors must bear adequate and appropriate responsibility and contribute to the restructuring of the bank as much as possible with their own resources. This is recognised as providing an incentive to both the aided bank and the capital holders/investors to avoid excessively risky strategies and to contribute towards a level playing field in the banking sector (and prevent aided banks gaining an unfair advantage).