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How to Reduce State Expenditures with Single Resolution Mechanism

Publication date: 12.2021

Financial Law Review, 2021, Issue 24 (4)/ 2021, pp. 177 - 193

https://doi.org/10.4467/22996834FLR.21.039.15406

Authors

Michal Janovec
Faculty of Law, Masaryk University, Brno
, Czech Republic
https://orcid.org/0000-0002-6565-4043 Orcid
All publications →

Titles

How to Reduce State Expenditures with Single Resolution Mechanism

Abstract

State aid is one of the wrong ways how to help any private entity when there is no other option, but in certain cases it is necessary from the larger point of view to do so. At least we were used to it especially in cases of big financial (or another) institutions, which are too big to fail, and it might be reasonable to “save” these entities to prevent bigger economic and social loss. For example, when bank fails, then many creditors lose their savings (although there is the deposit guarantee schemes), so they might stop using banking system, many people would lose their jobs (extra social expenses for state). This will all lead to reduce investing money for investors or consumers and that’s basically wrong for economy itself. On the other hand, state aid is highly negative for competition, because all those private entities without any need for state aid are disadvantaged. And finally, its taxpayer’s money, used for state aid and its big state expenditure for any country. The only way how to maintain good and healthy economic system without state aid is prevention. One of the preventions is Single resolution mechanism.

References

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Legal Acts
Directive 2014/59/EU of the European Parliament and of the Council of 15th May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/30/EU
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Information

Information: Financial Law Review, 2021, Issue 24 (4)/ 2021, pp. 177 - 193

Article type: Original article

Authors

https://orcid.org/0000-0002-6565-4043

Michal Janovec
Faculty of Law, Masaryk University, Brno
, Czech Republic
https://orcid.org/0000-0002-6565-4043 Orcid
All publications →

Faculty of Law, Masaryk University, Brno
Czech Republic

Published at: 12.2021

Article status: Open

Licence: CC BY-NC-ND  licence icon

Percentage share of authors:

Michal Janovec (Author) - 100%

Classification number:

JEL Classification System:

Business and Securities Law (K22)

Article corrections:

-

Publication languages:

English