Posted by Social Science Research Network
Antitrust and the Financial Sector – with Special Attention to “Too Big to Fail” – Lawrence J. White (New York University – Leonard N. Stern School of Business; Leonard N. Stern School of Business – Department of Economics)
ABSTRACT: Antitrust and the financial sector have traditionally had a wary relationship with each other. However, an analysis of the special features of finance and of financial regulation shows that the pro-competition stance of antitrust is as appropriate for the financial sector as it is for the other sectors of the U.S. economy to which antitrust enforcement regularly applies. More recently, the involvement of “too big to fail” (TBTF) financial institutions in the financial crisis of 2008-2009 has caused some antitrust practitioners to believe that the “big” in TBTF must mean that antitrust somehow has a role to play in dealing with the TBTF problem. But TBTF is fundamentally a problem of subsidy and negative externalities, not of market power; consequently, this is not an antitrust issue. Nevertheless, antitrust is relevant for many of the standard issues of the creation, enhancement, and/or exercise of market power in and around the financial sector. In addition, whether the communication among and/or collective action by securities holders in various circumstances (e.g., the creditors of a troubled enterprise) warrants antitrust scrutiny deserves some careful thought and analysis.
Featured News
Uruguayan Antitrust Scrutiny Puts Major Meatpacking Deal Between Marfrig and Minerva on Hold
May 19, 2024 by
CPI
Alaska Airlines Seeks Dismissal of Consumer Lawsuit Over $1.9 Billion Hawaiian Airlines Buy
May 19, 2024 by
CPI
Idaho Attorney General Orders Split of Kootenai Health and Syringa Hospital
May 19, 2024 by
CPI
Court Rejects T-Mobile’s Appeal Bid in Antitrust Case Over Sprint Merger
May 19, 2024 by
CPI
Google Requests Judge, Not Jury, to Decide on Antitrust Case
May 19, 2024 by
CPI
Antitrust Mix by CPI
Antitrust Chronicle® – Ecosystems
May 9, 2024 by
CPI
Mapping Antitrust onto Digital Ecosystems
May 9, 2024 by
CPI
Ecosystems and Competition Law: A Law and Political Economy Approach
May 9, 2024 by
CPI
Ecosystem Theories of Harm: What is Beyond the Buzzword?
May 9, 2024 by
CPI
Open Ecosystems: Benefits, Challenges, and Implications for Antitrust
May 9, 2024 by
CPI