Unlimited Liability of State-owned Banks under the EC-Rules of State Aids

supervision.- III. Applicability of Article 92 EC Treaty to public companies.- D. Institutional burden and guarantor liability as a subsidy?.- I. Sureties or guarantees as subsidies even in the absence of an actual case of liability.- II. Guarantor liability and institutional burden as liability by virtue of organization.- III. Subsidy law and property right.- IV. Unlimited assumption of liability as common market behavior of a private investor?.- 1. The concept of private investor.- a) The development of the legal concept of private investor by the Commission and the courts.- b) Further development into the "reasonable investor" concept.- c) Additional objectives for consideration in the private investor test.- d) Entrepreneurial discretion of the state.- 2. The business operations of savings banks and Landesbanken as comparable to the common market behavior of private banks.- 3. The assumption of unlimited liability for savings banks and Landesbanken as common market behavior of a private investor.- a) Forms of unlimited assumption of liability in banking transactions.- aa) Establishment and acquisition of private companies.- bb) Comfort letters.- cc) Covenants to cover losses.- dd) Right of recourse of the Deposit Guarantee Fund against the parent company.- b) Assumption of liability under private law in comparison with guarantor liability and institutional burden.- aa) Liability for all obligations with respect to all creditors.- bb) Secondary liability.- cc) Preliminary conclusion.- c) No comparability due to the immeasurable financial resources of the state?.- d) Preliminary conclusion.- V. Institutional burden and guarantor liability as the expression of financing responsibility under corporate law.- E. Institutional burden and guarantor liability as subsidies by virtue of refinancing advantages?.- I. Presence of an economic benefit.- 1. Reduction of refinancing costs through institutional burden and guarantor liability.- 2. No benefit to public banks due to a de facto liability on the part of the state for all major banks.- 3. No benefit because of simultaneous financing disadvantages?.- 4. Reduction of possible refinancing advantages through bank supervision and guarantee of deposits.- II. The assumption of unlimited liability as a common market form of financing for a private investor.- 1. Possible means of financing for private enterprises.- 2. Free choice between liability and capital, even for the state.- 3. The absence of a consideration as an indicator for a subsidy.- a) The absence of a commission on guarantee as an indicator for a subsidy.- b) Uncommonness of a direct consideration for private bank liability.- 4. Preliminary conclusion.- III. Proof and quantification of a benefit.- 1. The quantification of "standing subsidies".- 2. The Commission's attempt at quantification by means of a ratings comparison.- 3. Proof and quantification of a benefit by means of credit ratings.- a) Description of the rating system.- aa) The concept of ratings.- bb) The rating of financial institutions under public law.- cc) Test approach for a ratings comparison.- b) The impact of ratings on decisions to grant credit or to invest.- aa) Quality and objectivity of the rating.- bb) Acceptance of the rating and its relevance to decision making.- c) Perceptible raising of capital in ratings-influenced markets?.- aa) The refinancing structure of Landesbanken.- bb) The refinancing structure of savings banks.- d) Downgrading of a rating for a hypothetical discontinuation of guarantor liability: The stand-alone rating.- aa) The concept of the stand-alone rating.- bb) Fitness of the stand-alone rating concept.- e) An assessment of the calculation made by the Commission.- f) Savings of interest expenses or of a commission on guarantee as a benefit?.- IV. Conclusions.- F. Actual contributions of capital as a subsidy?.- I. Differentiation between the existence of and the execution of institutional burden.- II. Actual contribution of capital in a crisis situation.- III. Continuance of institutional burden in a crisis situation.- G. Special features of the banking sector: Compatibility of subsidization "to relieve a major economic disturbance" (Art. 92,3(C)).- I. Major economic disturbance.- II. Special features of the banking sector.- 1. Measures of the state in the event of a general bank crisis.- 2. Measures of the state for the benefit of a single financial institution.- 3. Incompatibility of subsidies for purposes of preventing an economic disturbance.- H. Distortion of competition and impairment of international trade.- I. Distortion of competition.- II. Impairment of international trade.- I. Summary.- I. Institutional burden and guarantor liability as subsidies?.- II. Institutional burden and guarantor liability as subsidies by virtue of refinancing advantages?.- III. Actual contributions of capital as subsidies?.- IV. Special features of the banking sector: Compatibility of subsidization "to relieve a major economic disturbance" (Art. 92,3 (c) EC Treaty)?.