Adopted in 2013 – and based on the unfortunately premature conviction that the difficulties of European banks had by then been dealt with – the current approach greatly limits government intervention to support banks that are fundamentally viable in order to remedy market failures or negative externalities that are not originated by managerial shortcomings.
Indeed, according to the BRRD, any public intervention that counts as state aid (and is not among the very few exceptions allowed by the directive) automatically triggers the resolution procedure. This, in turn, determines an overlap and, as a result, the prevalence of competition and state aid policy objectives over the objective of safeguarding financial stability.