Thursday, December 18, 2008
Posted by D. Daniel Sokol
John Vickers of the University of Oxford Economics Department provides some critical insights into The Financial Crisis and Competition Policy: Some Economics.
ABSTRACT: It is a familiar pattern that when the going gets tough, some of the not-so-tough seek exemptions from competition law. But might they have a point, especially when they are banks in an unprecedented financial crisis?
This note reviews some of the basic economics of the crisis before concluding that October’s systemic bank rescue package is not unduly competition-threatening, whereas the waiver of merger policy for the Lloyds TSB acquisition of HBOS was probably a policy mistake.