Normalizing Deposit Guarantee Schemes’ alternative measures as solution to banking crisis

During the international financial crisis, the EU Commission for the first time considered a banking crisis a serious disturbance in the economy of a Member State, normalizing the application of Article 107(3)(b). Afterwards, the EU adopted the SRM regulation and BRRD directive, shaping the Banking Union: as of 1st of January 2016, the SRM and BRRD stipulate that State aid should only be an option of last resort, preferring bail-in instead of bail-out. Moreover, DGS directive provides that DGS may issue alternative measures in order to prevent a bank from failing if the bank has not received extraordinary public financial support.
Against this background, the paper analyses if DGS alternative measures could represent a feasible response to a banking crisis. It seeks to identify in both normative and administrative frameworks the new concept of bailing together, according to which the application of DGS alternative measures may be compatible with State aid and Banking Union law.