Antitrust e concorrenza
Luglio 2013

The regulation of the ‘too big to fail banks’ under the European merger control: many difficulties and a suggestion

Estremi per la citazione:

Giannino M., The regulation of the ‘too big to fail banks’ under the European merger control: many difficulties and a suggestion, in Riv. dir. banc., dirittobancario.it, 21, 2013

ISSN: 2279–9737
Rivista di Diritto Bancario

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This article is based on the paper “Too big to fail banks: what can merger control do? An European perspective”, presented at the CLASF “Competition Law and the economic crisis” workshop, Edinburgh 13 September 2012.

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1. Too big to fail banks and competition law: an introduction

The term of too-big-to-fail banks (hereinafter TTBF) refers to the financial institutions that are not allowed to fail due to the catastrophic effects that may follow because of their size, complexity and systemic interconnectedness1. Historically, the first time the TBTF problem hit the headlines dated back to the 1984 rescue of Continental Illinois National Bank (Continental). Due to an increase in non-performing loans Continental experienced a run from foreign investors. Continental was then one of the largest US banks and it was the largest domestic commercial and industrial lender. Its failure was likely to pose systemic risks, threatening many small banks and also negatively affecting the confidence of foreign investors in US financial markets. Therefore, the Federal Deposit Insurance Corporation decided to rescue Continental by providing guarantee to all creditors and depositors of the bank and funded Continental’s capital increase2.

From then on, as a result of an ongoing consolidation process, the size of banks and the degree of concentration in banking markets have increased worldwide3, leading to the emergence of the TBTF entities with the associated problems. First, these are large and complex organizations with strong political power difficult to manage and supervise, which fuels the public perception that big banks go unpunished4. Second, precisely because of their size and high level of interconnectedness those institutions have a systemic relevance for financial markets and pose systemic risks for financial stability5. The 2008 financial crisis showed that the difficulties of a systemic institution easily propagate to the whole financial system and then to the non-financial sector with potentially catastrophic effects6. Third, TBTF banks enjoy a government guarantee that shields them from the risk of insolvency. Governments will not let them fail because the costs expected from the failure are lower than the costs borne by stakeholders. Thus, banks have a strong incentive to gain the status of TBTF7, because they gain an unfair competitive advantage over smaller banks in terms of higher credit ratings and cheaper credit in interbank markets. In this way, they can expand their borrowing capacities and offer to customers terms and conditions unmatchable by rivals which, as a result, may have to exit the market8. Yet, such excessive risks may threaten the TBTF entities, whose market exit, due to size and systemic relevance, may endanger the stability of financial markets and also restrain competition by increasing the level of market concentration9.

That said, the “financial regulation approach” or enforcement of the prudential rules and exercise of the supervisory powers provided in the sector financial regulation seems to be the best policy option to handle the TBTF problem. However, there exist concerns about the feasibility of the financial regulation approach. Indeed, financial regulators may be captured by large influential regulated undertakings and they may not enforce prudential rules and exercising supervisory powers with regard to TBTF banks10. On the contrary, competition authorities are less sensitive to the influence of the banking industry, since they have a general jurisdiction on the whole economy. Therefore, they are less likely to becaptured by TBTF banks11.

It can be then argued that competition law and, in particular, merger control law can be used to regulate large banking concentrations resulting in the creation of TBTF banks. Theterm of merger control approach refer to the power of competition authorities to regulate a banking merger leading to the creation of a TBTF entity that, due to the systemic relevance of that entity, may negatively affect competition. The remainder of this article focuses on the question whether under the EC Regulation 139/2004 the European Commission has such regulatory power.

2. Anticompetitive effects of TBTF and merger control

A TBTF merger may negatively affect competition at the end of quite a long causation chain based on a number of assumptions. In particular, the key assumption is that the failure of big and interconnected undertakings may have a systemic impact, triggering a domino effect potentially threatening the stability and competition in financial markets. The exit of a TBTF entity from the market may lead to an increase in the degree of market concentration. Higher prices, lower output and a decline in innovation may also follow12. And due to the interconnectedness in the banking sector, the banks exposed to the insolvent institution may also run the risk of going out of the market. Their exit may therefore trigger a new causation link leading to further negative effects on competition.The question now is whether under the EC Regulation 139/2004 banking concentrations restricting competition in the way described above fall within the regulatory jurisdiction of the Commission13

Whether TBTF concentrations fall within the regulatory purview of the European Commission is far from certain for many reasons. First, the alleged anticompetitive effects of a TBTF merger are imputable to the bigness and the interconnectedness of a TBTF entity. Yet, bigness as such is not considered as a competition offenceas illustrated by the clearance of Unicredito/HVBled to the creation of Unicredit Group a large financial institution active in many European countries14. The Commission unconditionally cleared the mergergiven that the merging parties operated in different markets and their combined market share in the markets where they overlapped did not give rise to competition concerns.

Secondly, the expected anticompetitive effects of TBTF mergers may take place in a time horizon much longer than that normally taken into consideration under the SIEC test15. More precisely, such effects occur at the end point of a long causality link starting with the materialization of the systemic risk of the TBTF entity.

Third, the anticompetitive effects of the TBTF merger occur because of some ill-fated decisions made by the merged entity. Those decisions in the first place affect the merged entity itself to cause it to fail; and only subsequently they reverberate on third parties. Instead, in case of non-TBTF mergers, the feared anticompetitive effects are due to the likelihood that the merged entity may exert its market power at the detriment of competitors and consumers16.

Four, the competition problems with a TBTF merger are not caused by the changes to the market structure directly brought about by the consummation of the merger. On the contrary, they are imputable to the post-merger conducts of the merging parties that, probably because of ill-advised risk taking, cause the merged entity to fail.

All these factors may explain why the competition authorities ignore the negative impact that the systemic nature of a TBTF entity may have on competition17, as the case with the merger operation by which Royal Bank of Scotland (RBS), Fortis and Santader agreed to acquire ABN AMRO and break up the assets of the former among them. The RBS and Santader acquisition of the ABN AMRO assets were unconditionally approved by the Commission18. Instead, the Commission found that the Fortis acquisition of the Dutch activities of ABN AMRO might reduce competition in the Dutch banking markets. As a result, in order to authorize the transaction, it required Fortis to divest a corporate banking business and the Dutch factoring activities of ABN AMRO19. The entities resulting from the transaction were amongst Europe’s largest and most important banks. The systemic risks due to the size of the parties finally materialized with the 2008 financial crisis which brought RBS and Fortis on the verge of insolvency. The acquisition of the ABN AMRO assets, which turned out an excessive risk taking activity, was one of the reasons for the weakness of RBS and Fortis which were then rescued by the intervention of the UK and Belgian Governments, respectively20.

The competition law community is divided on the question whether it is possible to tackle the TBTF problem through merger control.The idea that merger control can be effectively used to prevent the creation of TBTF entitiesis advocated mainly by members of competition authorities. It was articulated by Thomas Rosch from the US Federal Trade Commission. He argued that a TBTF merger breaches Section 7 of the US Clayton Act. In his view, a merger leading to the creation of an undertaking, whose failure is likely to have a catastrophic effect because such undertaking is so integral to the market, may substantially lessen competition Thereby, it is the better to prevent the creation of such undertaking from the outset instead of bailing it out through public monies21. The hostility against the creation of large undertakings is also shared by the former Antitrust Attorney General at the US Department of Justice (DOJ), Christine Varney. Indeed, she viewed as a failure of antitrust law to allow the creation of institutions that are too big to fail’22. Similar concerns have been voiced also by Neelie Kroes, the former European Competition Commissioner by stating that: ‘nor do we want to see two struggling banks cripple each other through a botched merger, or create another bank that is too big to fail’23. A lax merger review favouring the creation of TBTF entities may exacerbate the problem of moral hazard caused by bank’s excessive risk taking activities due to weak prudential regulation. Larger institutions may have stronger incentives to take higher risks24.

The idea to use merger control to regulate TBTF banks was also backed in academic circles. Prof. Markham writing on the conditions for the antitrust intervention against TBTF entities argued that competition authorities should block a merger when the size of merged entity exceeds maximum optimal scale and its failure would presumably require bail out measures25. Prof. Zingales contended that competition law should regulate transactions conferring on the merging parties excessive political power.26 Yet, this position was strongly opposed by others who pointed out that the decision to block a TBTF merger implies a complex assessment ofthe strong and weak points regarding to the size of the merging banks. These are policy considerations that fall outside the regulatory purview of merger control27. Additionally, finding in a TBTF merger a competition injury may be problematic28. Indeed, merger control typically focuses on the question whether a proposed merger may have a negative impact on competition and it does not provide any tool to ascertain whether a financial institution is too big to fail29. This may be a difficult task for competition authorities that lack the necessary skill set and expertise to carry it out30.

3. Articulating the merger control approach

The proposed merger control approach rests on the assumption that the systemic relevance of the merged entity and the probability that the merger has anticompetitive effects are correlated. Due to its size and interconnectednessthe merged entity may be perceived as a TBTF, and accordingly it may enjoy the governmental guarantee against insolvency. And this guarantee may create a moral hazard problem, inducing the TBTF entity to take excessive risks in its operations and excessive risk may negatively affect competition in two ways. First, when the TBTF entity is still thriving in the market, smaller competitors may be foreclosed as unable to effectively compete with it. Secondly, when things go bad for the TBTF entity, unless governments bail it out the latter may fail and its failure may result in higher levels of market concentration.

To take into account all these assumptions and possibilities, the merger review of large banking concentrations should also include, other than the traditional competition appraisal, a systemic analysis to establish whether the merged entity may have a systemic nature. To this end, the Commission could rely on a four-limb test, incorporating the criteria developed by the international financial regulators to identify the qualifying characteristics of TBTF: size, interconnectedness, complexity and substitutability of services supplied31. Biggerand more interconnected banks run a higher risk of systemic failure32. The complex nature of a bank depends in its organizational and business model33, and this criterion is met, for example, by the institutions having a large number of subsidiaries, especially when they are scattered in many jurisdictions. Finally, a bank is substitutable if, in case of marker exit it is possible to find a new supplier for the services it provided within a reasonable period of time34.

After establishing that the entity resulting from the merger may have the status of TBTF, it is necessary to consider whether the merger is likely to reduce competition. If the merger operation creates a TBTF entity operating in open and competitive banking markets, new entrants will easily replace it. Hence, in spite of the systemic nature of the merged entity, the merger is unlikely to have negative consequences for competition35. This may not be the case when the merger takes place in banking markets with high entry barriers making the entry of new competitors unlikely36. In this case the TBTF bank leaving the market may be conducive to an increase in the level of market concentration. It must be borne in mind, however, that, as explained above, the allegedly anticompetitive effects of a TBTF merger are due to the future conducts of the merged entity in post-merger markets. Therefore, in order to block a merger on this ground, the Commission has to corroborate its predictions by producing convincing evidence to the standard set out by the EU judiciary in the Tetra Laval37 and General Electric38.

a) The capability of the European Commission to carry out the systemic analysis

It can be argued that the European Commission possesses the skills to carry out the systemic analysis limb of the proposed merger control approach. Indeed, it assesses the systemic nature of financial institutions in the context of State aid in applying Article 87(3)(b) to the rescue packages granted to the banks hit by the 2008 crisis. The policy goals sought after by the Commission is maintain a healthy competition without endangering the financial stability and also to curb the moral hazard39. Under the Bank Restructuring Guidelines the Commission carefully examines the restructuring plans submitted by aid recipients and itconsiders which measures are necessary to ensure its the long term viability of the latter. To this end aid recipients may be required to leave excessively risky markets40.

The Commission can also rely on the work of the European Banking Authority (EBA). According to Article 22 of the EU Regulation 1093/2010, the EBA has to develop a set of indicators to identify and measure systemic risks and adequate stress-test to identify which institutions are exposed to systemic risks. It has also the power to assess the impact of a financial institution on financial stability on its own initiative or upon request of the Commission. Pursuant to Article 32 the EBA monitors and assesses market developments and inform a number of bodies, among which the Commission, about the relevant micro-prudential trends, potential risks and vulnerabilities. Finally, under Article 34 the EBA provides opinions to the Commission on all issues falling within its area of competence when requested by the Commission or on its own initiative. Arguably, considering the institutional tasks the provisions in Articles 22, 32 and 34 of the EU Regulation 1093/2010 confer on the EBA, the Commission can seek from EBA guidance on whether a merged entity may have a systemic nature and create systemic risks for financial stability.

b) Policy considerations in favour of the merger control approach

A number of policy objectives of EU Competition law seem to support the idea to rely on merger control to regulate the size of banks. Before considering them, it may be helpful to have a cursory look at the some fundamental aspects of financial markets that also calls for extending the competition review of banking mergers to systemic considerations. Whatever way competition interacts with financial stability41, it must be borne in mind the specialty of the bank sector. Banks borrow short and lend longand their reliability depend on trust and confidence. The failure of a single bank may have systemic effects, first by propagating to the other banks exposed to the former and then to the whole industry. This may occur because, due to interbank exposure and information asymmetries, being unable to distinguish solvent from insolvent banks, consumers may see in the failure of a bank evidence of the unhealthy conditions of other banks and run on them. Bankingis different from other business sectors because, due to the negative externalities of a bank failure, the exit of a bank from the market may harm its competitors as well42.

The risk factor is a relevant element for financial transaction. Therefore, in order to be considered as a reliable proxy for competition in financial markets, prices have to be adjusted with risk consideration43. To sum up, a bank may be taking important risks on the assets side to offer favourable terms to customers. Such risks, however, when they materialize may lead to the failure of this undertaking and the subsequent market exit of such large and highly interconnected actors may negatively affect competition in the medium and long term. In addition, a TBTF merger may reduce the requisite degree of diversity for the stability of financial markets44. For all these reasons the Commission should weight the impact that the systemic risks associated with a TBTF merger may have on competition45.

That said, the enhancement of consumer welfare is the main objective of the EU competition policy. In examining the competition impact of merger the Commission protects “competition in the market as a means of enhancing consumer welfare and ensuring an efficient allocation of resources”46. A TBTF merger may have short term positive effects followed by negative consequences in the long term for consumer welfare. Initially the merged entity applies low interest rates for borrowings to families and undertakings because it has cheaper access to credit in the interbank markets than its competitors47. Yet, these benefits may be outweighed by the long term negative effects that may occur in case of insolvency of the merged entity. The ensuing market exit of the merged entity will bring about lower output, higher prices and a probable diminution in innovation; all these factors may reduce consumer welfare. Interestingly, the Commission followed a similar line of reasoning in General Electric/Honeywell48, noting that while in the short term the integration of the businesses of the merging parties would lower prices; but, in the long term the price reduction would drive competitors off the market and the parties would rise prices to the pre-merger levels.

On balance, a TBTF merger may create a lose-to-lose situation for consumer welfare. If national authorities let the merged entity fail the consumer welfare may be harmed because of higher prices and less choice, following the market exit of this firm. Alternatively, government may bail out the merged entity, which may have painful consequences for taxpayers. Or, national authorities may opt for a rescue merger, which, however may not be a panacea for the problems of the TBTF entity. Rescue mergers are allowed on the basis of stability considerations to the detriment of competition and may exacerbate the TBTF problem with the entity resulting from the transaction requiring public support49. Finally, if the things go well for the TBTF bank, smaller rivals may be forced to exit the market, being able to effectively compete with it without the governmental safety net.

The promotion of economic efficiency is among the policy objectives of EU competition law50. Apparently, blocking TBTF mergers would be incompatible with this objective, since the merged parties would deprived by the economic efficiencies expected from the merger. This statement is ill-grounded given the uncertainties surrounding the capability of TBTF mergers to improve efficiency. Recent empirical studies showed that economies of scale from banks whose assets are beyond certain financial thresholds, $ 100 billion in assets, are poor or non existent51. As the size banks grows, the inability to manage prudently and to implement effective risk-management systems contribute to create diseconomies of scale52.

What can be argued is that the Commission can block a TBTF merger without imposing on the parties the sacrifice to renounce to the expected economies of scale as such transactions are thought to be unlikely to generate economic efficiencies. On the contrary, a negative decision may prevent protect smaller and more efficient firms to the benefit of competition. Due the governmental guarantee, aTBTF entity can implement an aggressive commercial policy, leading to foreclosing smaller competitors. This effect is not the result of the merged bank’s superior efficiency in competing on its merits; but rather, it is the outcome of strategically exploiting its status of TBTF.

EU competition law is also concerned about the integration and preservation of the single market. The insolvency of TBTF bank could undermine the mutual trust among banks. And with no or a little mutual trust it would be difficult for banks to have access to funds in the interbank markets. As a result, the working of the single banking market may be in jeopardy, with banks focusing only on domestic markets at the detriment of cross-border activities.

Governmental intervention to rescue ailing banks would hamper the functioning of single market, as well. As summarized by the words of Melvyn King’s “global banking institutions are global in life but national in death”53, bailing outs are typically aimed at rescuing domestic financial institutions. Because these subsidies are likely to be considered as state aid under EU law, the Commission may have to impose compensatory measures to avoid distortions of competitions. These measures, especially those obliging the aid recipient to sell assets located in different Member States, led to unwanted collateral effects. Indeed, they conflicted with the working of single market, having as consequence the segmentation of EU-based banks within their national borders54. With the Restructuring Communication the Commission modified its earlier approach, by setting out the need when designing the compensatory measures to avoid retrenchment within national borders and a fragmentation of the single market55.

 

1

IMF Staff Discussion Paper, ‘The Too-Important-to–Fail Conundrum: Impossible to Ignore and Difficult to Resolve’, May 27, 2011 SDN/11/12.


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2

Bernard Shull, ‘Too Big to Fail in Financial Crisis: Motives, Countermeasures, and Prospects’, Levy Economics Institute, Working Paper no. 601; Axel Wieandt, Sebastian C. Moenninghoff, Too Big to Fail?!- Lessons from the Financial Crisis’.


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3

IMF Discussion Paper, above n.1; Morris Goldstein, Nicolas Véron, ‘Too Big to Fail: The Transatlantic Debate’, Peterson Institute for International Economics, Working Paper 11-2.


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4

Luigi Zingales, ‘Break-up the big bad banks’, Il sole 24 ore, 31 July 2012, http://www.ilsole24ore.com/art/notizie/2012-07-31/breakup-banks-063542.s....


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5

OECD, Background Note on Competition and Financial Markets (2009). See also, Thorsten Beck, Diane Coyle, Mathias Dewatripoint, Xavier Freixas, Paul Seabright, ‘Bailing Out Banks: reconciling Stability with Competition. An Analysis of State-supported Schemes for Financial Institutions’, www.cepr.be. According to Recital 13 of EU Regulation 1093/2010, systemic risks can be defined as a risk of disruption in the financial system with the potential to have serious negative consequences for the internal market and the real economy.


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6

IMF Discussion Paper, above n.1.


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7

Stan Maes, Kamil Kilianski, ‘Competition and the financial markets: Financial sector conditions and competition policy’, European Commission Competition Policy Newsletter 1 (2009) 12.


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8

Schull, above n.2.


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9

J. Thomas Rosch, Implications of the Financial Meltdown for the FTC, speech delivered at the New York Bar Association Annual Dinner, 29 January 2009.


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10

IMF Discussion Paper, above n. 1.


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11

Zephyr Teachout, ‘Proposal for a New Antitrust Law’, speech delivered at Eugene P. & Delia S. Murphy Corporate Conference, New Ideas for Limiting Bank Size, Fordham Law School, 12 March 2010.


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12

Rosch, above n.9; Jesse W. Markham Jr, ‘Lessons for Competition Law from the Economic Crisis: The Prospect for Antitrust Responses to the “Too –Big-To-Fail” Phenomenon’, www.ssrn.com.


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13

According to the SIEC test in EC Regulation 139/2004 , a merger is incompatible with the common market when it “…would significantly impede effective competition in the common market or in a substantial part of it”


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14

Case M. 3894, Unicredito/HVB.


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15

Markham, above n.4.


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16

Id.


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17

On the difficulties to appraise the threats to competition posed by TBTF mergers in the context of the US antitrust law, see Carl Felsenfeld, ‘An Antitrust Approach’, speech delivered at Eugene P. & Delia S. Murphy Corporate Conference, New Ideas for Limiting Bank Size, Fordham Law School, 12 March 2010; Another factor that contribute to explain why TBTF mergers go unnoticed by competition authorities is the extensive reliance on the remedy of divestiture of branch offices to resolve any competition problems created by a banking mergers. On this issue also, see in the context in the field of US antitrust law, see Bernard Shull, above n.2.


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18

European Commission, Case M.4843, RBS/ABN AMRO Assets and Case M.4845, Santader/ABN AMRO.


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19

European Commission, Case M.4844, Fortis/ABN AMRO Assets.


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20

The European Commission authorized the aid granted to RBS and Fortis upon the condition of the recipients complying with several commitments. See Cases N 422/2009 and N 621/2009, RBS Restructuring plan; Cases N 255/2009, N 274/2009, N 574/08, NN 42/2008, NN 46/2008 and NN 53/2008/A, Restructuring Aid to Fortis Bank.


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21

Rosch, above n.9.


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22

See confirmation hearing on Executive Nominations, 16 March 2009.


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23

Competition, the Crisis and the Road to Recovery, speech at the 13th Annual Competition Conference of the International Bar Association, Fiesole, Italy, 11 September 2009.


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24

Stan Maes, Kamil Kilianski, ‘Competition and the financial markets: Financial sector conditions and competition policy’, European Commission Competition Policy Newsletter 1 (2009) 12.


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25

Markham, above n.12.


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26

Luigi Zingales, A Capitalism for the People, Recapturing the Lost Genius of American Prosperity (New York, 2012), 157.


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27

Carsten Grave, ‘Merger Control in the Banking Sector during the Financial Crisis’, www.ssrn.com.


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28

Susanne Zuehlke, ‘Prudential v Competition: A Unified Theory of Harm for Banking Regulation- Regulation and Competition Law, speech delivered at St. Gallen, 7/8 April 2011.


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29

Barack Orbach, Grace Campbell Rebling ‘The Antitrust Curse of Bigness’, (85) Southern California Law Review, 605, 651.


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30

Albert Foer, Preserving Competition After the Meltdown, Global Competition Policy, December 2008.


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31

Goldstein and Veron, above n.3.


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32

IMF Discussion Paper, above n.1.


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33

Wieandt, Moeninghoff, above n.2


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34

Id.


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35

Goldstein, Veron, above n.3.


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36

OECD background note, above n. 5.


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37

ECJ, Case C-12/03P, Commission v Tetra Laval BV, [2005] ECR I-987.


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38

CFI, Case T-210/01, General Electric v Commission, [2005] ECR II-5575.


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39

Joachim Almunia, Competition policy for the post-crisis era, Speech/12/249; Jonathan DeVito, ‘The Role of Competition Policy and Competition Enforcers in the EU Response to the Financial Crisis: Applying the State Aid Rules of the TFEU to Bank Bailouts in order to Limit Distortions of Competition in the Financial Sector, AAI Working Paper n. 11-01.


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40

Hans Gilliams, ‘Stress Testing the Regulator: Review of State Aid to Financial Institutions after the Collpase of Lehman’, (2011) 36 European Law Review.


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41

According to the traditional view, the objective to preserve financial stability prevails over maintaining healthy competition and too much competition is thought to be likely to reduce the future value of banking activity, thereby inducing banks to take excessive risks. Recent theoretical studies, however, have showed with the support of empirical data that competition does not necessarily result in putting stability in jeopardy. Yet concerns that competition may be detrimental for stability increased were voiced insome official reports that blamed excessive competition for the meltdown of financial markets. See on this issue, OECD, Background Note, Competition Issues in the Financial Sector, above n.5.


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42

Lorenzo Coppi, Jenny Haydock, ‘The Approach to State Aid in the Restructuring of the Financial Sector’, 5 (2009) 2 Competition Policy International, 77.


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43

Elena Carletti, Giancarlo Spagnolo, Stefano Caiazza, Caterina Giannetti, ‘Banking Competition in Europe: Antitrust Authorities at Work in the Wake of the Financial Crisis9, www.ssrn.com..


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44

Maurice E. Stucke, ‘Lessons from the Financial Crisis’, the University of Tennessee Legal Studies Research Paper Series, www.ssrn.com.


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45

OECD background note, above n. 5.


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46

Neelie Kroes, Speech 05/512 of 15 September2005.


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47

On this point, see Dario Focarellli and Fabio Panetta, “Are Mergers Beneficial to Consumers?” American Economic Review (92) 2003, p. 1152. In analyzing the impact of banking merges leading to an increase in the level of concentration of Italian retail banking markets, these researchers found out post-merger in the short term interest rates applied to consumers decreased but they considerably increased in the long term.


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48

Case M.2220.


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49

For example in the UK the LlyodsTSB/HBOS merger was authorised by the Secretary of State on the basis of the public interest ground, the stability of the UK financial system, newly introduced in the Enterprise Act 2002. Being later close to bankruptcy, Llyods had to seek financial support from the UK Government, see European Commission, Case N 428/2009.


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50

See Recital n. 29 of EC Regulation 139/2004 and the Commission Horizontal merger guidelines, especially paragraphs 76-88.


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51

FM Scherer, ‘A perplexed economist confronts ‘Too Big to fail’?; on the reasons why big-sized undertakings suffers from diseconomies of scale.


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52

Goldstein, Veron, above n.3.


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53

Aalborn C, Piccinin D., (2009), ‘The application of the principles of restructuring aid to banks during the financial crisis, www.ssrn.com.


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54

Gilliams, above n. 40.


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55

Commission Communication on the return to long-term viability and the assessment of restructuring measures in the financial sector in the current crisis’, 2010 OJ C195/09.


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