¹ See, eg, Reinhart, CM and Rogoff, KS, This Time is Different: Eight Centuries of Financial Folly (Princeton NJ, Princeton University Press, 2009)Google Scholar; de Haan, J, Oosterloo, S and Schoenmaker, D, Financial Markets and Institutions: A European Perspective, 2nd edn (Cambridge, Cambridge University Press, 2012)CrossRefGoogle Scholar; Valdez, S and Molyneux, P, An Introduction to Global Financial Markets, 7th edn (Basingstoke, Palgrave Macmillian, 2013)Google Scholar.

² See Jarsulic, M, ‘The Origins of the US Financial Crisis of 2007: How a House-Price Bubble, a Credit Bubble, and Regulatory Failure Caused the Greatest Economic Disaster since the Great Depression’ in Wolfson, MH and Epstein, GA (eds), The Handbook of the Political Economy of Financial Crisis (Oxford, Oxford University Press, 2013) 30 Google Scholar; Krugman, P and Wells, R, Macroeconomics, 3rd edn (New York, Worth’s Publishers, 2013) 432 Google Scholar.

³ Interest rates were extremely low due to large capital flows from abroad to the US economy, the US Federal Reserve, and low inflation. See, eg, Jarsulic, n 2 above.

⁴ See R Guttman and D Plihon, ‘Whither the Euro? History and Crisis of Europe’s SingleCurrency Project’ in Wolfson and Epstein, n 2 above, 368.

⁵ See, eg, Quigley, C, ‘Review of the Temporary State Aid Rules Adopted in the Context of the Financial and Economic Crisis’ (2012) 3 Journal of European Competition Law & Practice 237 CrossRefGoogle Scholar; see generally Quigley, C and Collins, AM, EC State Aid Law and Policy (Oxford, Hart Publishing, 2003)Google Scholar.

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⁷ See, eg, positive signs are noted in ‘Towards a Genuine Economic and Monetary Union’, available at: www.consilium.europa.eu/uedocs/cms_data/docs/pressdata/en/ec/134069.pdf.

⁸ In 1999 several MS attempted to stabilise their exchange rates through the Exchange Rate Mechanism, see generally Arestis, P and Sawyer, M, ‘Can the Euro Survive after the European Crisis?’ in Arestis, and Sawyer, (eds), The Euro Crisis (Basingstoke, Palgrave Macmillian, 2012)CrossRefGoogle Scholar.

⁹ Chiti, E and Teixeira, PG, ‘The Constitutional Implications of the European Responses to the Financial and Public Debt Crisis’ (2013) 50 Common Market Law Review 686 Google Scholar; Guttman, n 4 above, 372 reported €750 bn.

¹⁰ Ruffert, M, ‘The European Debt Crisis and European Union Law’ (2011) 48 Common Market Law Review 1785 Google Scholar.

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¹² Tymoigne, E, ‘Financial fragility’ in Toporowski, J and Michell, J (eds), Handbook of Critical Issues in Finance (Cheltenham, Edward Elgar, 2012) 102 Google Scholar.

¹³ For existing classifications see, eg, Lastra, RM and Wood, GE, ‘The Crisis of 2007–2009: Nature, Causes, and Reactions’ (2010) 13 Journal of International Economic Law 531 CrossRefGoogle Scholar; 537; Garicano, L and Lastra, R, ‘Towards a New Architecture for Financial Stability: Seven Principles’ (2010) 13 Journal of International Economic Law 597 CrossRefGoogle Scholar.

¹⁴ Avgouleas, E, ‘The global financial crisis, behavioural finance and financial regulation: in search of a new orthodoxy’ (2009) 9 Journal of Corporate Law Studies 121 Google Scholar. The US abolished the Glass-Steagall Act 1933. On information asymmetries and ‘moral’ hazard problems see, eg, Kessler, O and Wilhelm, B, ‘Financialization and the Three Utopias of Shadow Banking’ (2013) 17 Comp and Change 251 Google Scholar; on government failure, see Stucke, ME, ‘Lessons from the Financial Crisis’ (2011) 77 Antitrust Law Journal 314 Google Scholar.

¹⁵ Möslein, F, ‘The focus of regulatory reforms in Europe after the global financial crisis: from corporate to contract governance’ in Sun, W, Stewart, J and Pollard, D (eds), Corporate Governance and the Global Financial Crisis: International Perspectives (Cambridge, Cambridge University Press, 2011) 286 Google Scholar.

¹⁶ Banks and firms were taking on extensive risk; therefore, managers were given incentives so as to generate higher returns for shareholders. On collective moral hazard see, eg, Farhi, E and Tirole, J, ‘Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts’ (2012) 102 American Economics Review 60 CrossRefGoogle Scholar.

¹⁷ The 2009 Report of the OECD Steering Group on Corporate Governance (24 February 2010) identified excessive remuneration, risk management, board practices and the exercise of shareholder rights as main problematic areas of corporate governance.

¹⁸ Profits had to be paid to bond holders and other creditors plus a competitive return to equity owners see, eg, Kregel, , ‘Political Economy Approaches to Financial Crisis: Hyman Minsky’s Financial Fragility Hypothesis’ in Sun, et al (eds), Corporate Governance and the Global Financial Crisis n 15 above, 237 Google Scholar.

¹⁹ See for the US Markham, JW, ‘Lessons for Competition Law from the Economic Crisis: The Prospect for Antitrust Responses to the “Too-Big-to-Fail” Phenomenon’ (2011) 16 Fordham Journal of Corporate & Financial Law 263 Google Scholar.

²⁰ Stucke, n 14 above, 319; on rising bank concentration see, eg, FM Scherer, ‘Financial Mergers and their Consequences’, Harvard Kennedy School of Government Research Working Paper 19/2013.

²¹ See, eg, Zimmer, D and Rengier, L, ‘Entflechtung, Fusionskontrolle oder Sonderregulierung für systemrelevante Banken? Ansätze zur Lösung des “Too-big-to-fail” Problems’ (2010) 8 Zeitschrift für Wettbewerbsrecht 105 Google Scholar, who proposed a specific merger control, including a ‘decartelisation’ of banks.

²² X Vives, ‘Competition policy in banking’ (2011) Oxford Review of Economic Policy 27, 487.

²³ COMP/M6166 Deutsche Börse/NYSE Euronext [2011] OJ C199.

²⁴ Buchheit, L, ‘We Made it Too Complicated’ (2008) 27 International Financial Law Review 24 Google Scholar, who highlighted the complexity of modern financial instruments as the ‘big culprit’ of the crisis.

²⁵ Brummer, C, Soft Law and the Global Financial System: Rule Making in the 21st Century (Cambridge, Cambridge University Press, 2012) 223 Google Scholar.

²⁶ Brummer, C, ‘Why Soft Law Dominates International Finance-And Not Trade’ (2010) 13 Journal of International Economic Law 623 CrossRefGoogle Scholar; retrospectively see, eg, Lowenfeld, AF, ‘The International Monetary System: A Look Back Over Seven Decades’ (2010) 13 Journal of International Economic Law 575 Google Scholar; Trachtman, JP, ‘The International Law of Financial Crisis: Spillovers, Subsidiarity, Fragmentation and Cooperation’ (2010) 13 Journal of International Economic Law 719 CrossRefGoogle Scholar; Hufbauer, G and Xie, DD, ‘Financial Stability and Monetary Policy: Need for International Surveillance’ (2010) 13 Journal of International Economic Law 939 CrossRefGoogle Scholar.

²⁷ Source: EurActiv, ‘Financial Regulation: The EU’s agenda’, 1 April 2009, available at: www.euractiv.com/euro-finance-regulation-eus-agenda-linksdossier-188497.

²⁸ Critically on the Basel Committee’s ‘Core Principles for Effective Banking Supervision’, see Brummer, n 26 above, 225.

²⁹ Stucke, ME, ‘Teaching Antitrust After the Financial Crisis’ (2013) 8 Journal of Business & Technology Law 209 Google Scholar, suggesting that behavioural economics is now ‘mainstream’; Crotty, J, ‘The Realism of Assumptions does Matter: Why Keynes-Minsky Theory Must Replace Efficient Market Theory as the Guide to Financial Regulation Policy’ in Wolfson, and Epstein, (eds), n 2 above, 134 Google Scholar.

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³¹ Akinbami, F, ‘Is meta-regulation all it’s cracked up to be? The case of UK financial regulation’ (2013) 14 Journal of Banking Regulation 16, 20CrossRefGoogle Scholar.

³² Especially trust in the superiority of mathematics, game theory and modelling over rigorous disciplines such as law, political science, psychology, sociology and history.

³³ Markham, n 19 above, 265.

³⁴ See the insightful contributions of Lianos, I, ‘Judging’ Economists: Economic Expertise in Competition Law Litigation: A European View’ in Kokkoris, I and Lianos, I (eds), The Reform of EC Competition Law: New Challenges (Kluwer Law International, 2010) 185 Google Scholar; I Lianos and C Genakos, ‘Econometric Evidence in EU Competition Law: An Empirical and Theoretical Analysis’ CLES Research Paper 06/2012.

³⁵ See, eg, Cottier, T, ‘Challenges Ahead in International Economic Law’ (2009) 12 Journal of International Economic Law 3 CrossRefGoogle Scholar, on the failures of a ‘strictly disciplinary tradition’ of fragmentation and specialisation.

³⁶ Westbrook, D, Out of Crisis: Rethinking our Financial Markets (Boulder CO, Paradigm Publishing, 2009)Google Scholar.

³⁷ Kirchgässner, G, ‘Die Krise der Wirtschaft: Auch eine Krise der Wirtschaftwissenschaften?’ (2009) 10 Perspektiven der Wirtschaftspolitik 447, 452Google Scholar: ‘Dies ist ein Preis, den wir dafür zahlen müssen, dass wir zumindest im Bereich der Makroökonomik—keine experimentelle Wissenschaft sind: makroökonomische Experimente sind nie kontrolliert and sollten auch sehr zurückhaltend eingesetzt werden, da sie dann, wenn sie schief gehen, enorme gesellschaftliche Kosten haben können’. Thus one can disagree with the last paragraph since macroeconomic policies have always been tested on mankind and citizens have paid the social and economic costs of policy failure.

³⁸ Ibid.

³⁹ Posner, n 30 above, 23 suggested ‘subprime’ as a euphemism for mortgage loans to people at high risk of default.

⁴⁰ See also F Akinbami, ‘Retail Products and the Global Financial Crisis’, available on SSRN.

⁴¹ Huffman, M and Heidtke, D, ‘Behavioural Exploitation Antitrust in Consumer Subprime Mortgage Lending’ (2012) 3 William & Mary Policy Review 77, available on SSRNGoogle Scholar.

⁴² For a disposition to fraud, see Darby, MR and Karni, E, ‘Free competition and the optimal amount of fraud’ (1973) 16 Journal of Law and Economics 67 CrossRefGoogle Scholar; Akinbami, F, ‘Financial services and consumer protection after the crisis’ (2011) 29 International Journal of Bank Marketing 134, 137CrossRefGoogle Scholar.

⁴³ See especially Averitt, NW and Lande, R, ‘Using the “Consumer Choice” Approach to Antitrust Law’ (2007) 74 Antitrust Law Journal 175 Google Scholar; Albors-Llorens, A, ‘Competition and Consumer Law in the EU: Evolution and Convergence’ (2014) 33 Yearbook of European Law 1 CrossRefGoogle Scholar.

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⁴⁵ M Bruhn, S Farazi and M Kanz, ‘Bank Competition, Concentration, and Credit Reporting’, The World Bank Development Research Group, Finance and Private Sector Development Team, Policy Research Working Paper 64422/2013, 5.

⁴⁶ Ibid, 16.

⁴⁷ Hayek, FA, Prices and Production (London, Routledge, 1931)Google Scholar.

⁴⁸ Miller, RCB, ‘The Austrians and the Crisis’ (2009) 29 Economic Affairs 27, 28CrossRefGoogle Scholar.

⁴⁹ On the existing link between the use of aggressive mortgage lending and house price volatility see, eg, A Pavlov and S Wachter, ‘Subprime Lending and House Price Volatility’, University of Pennsylvania Institute for Law and Economics Research Paper no 08/2008.

⁵⁰ Slavin, SL, Macroeconomics, 9th edn (Boston MA, McGraw-Hill, 2009) 257 Google Scholar.

⁵¹ O’Connor, J, ‘Marxism and the Three Movements of Neoliberalism’ (2010) 36 Critical Sociology 704 Google Scholar.

⁵² Heimler, A and Jenny, F, ‘The limitations of European Union control of state aid’ (2012) 28 Oxford Review of Economic Policy 347, 363CrossRefGoogle Scholar.

⁵³ Ibid, 31.

⁵⁴ Grahl, G, ‘The Subordination of European Finance’ (2011) 15 Comp and Change 31, 43 noting in particular Japan (0.96%), Germany (2.40%), US (2.56%), France (2.86%), UK (3%)CrossRefGoogle Scholar.

⁵⁵ Ibid.

⁵⁶ Currently estimated at approximately 7 billion.

⁵⁷ On the rejection of ‘full’ employment see von Mises, L, Human Action (New Haven CT, Yale University Press, 1949)Google Scholar.

⁵⁸ Stiglitz, J, ‘The global crisis, social protection and jobs’ (2009) 148 International Labour Review 4 CrossRefGoogle Scholar.

⁵⁹ See, eg, Bivens, J and Shierholz, H, ‘The Great Recession’s Impact on Jobs, Wages, and Incomes’ in Wolfson, and Epstein, (eds), n 2 above, 61 Google Scholar.

⁶⁰ Clarke, T, ‘Corporate governance causes of the global financial crisis’ in Sun, et al (eds), Corporate Governance and the Global Financial Crisis n 15 above, 43 Google Scholar.

⁶¹ Slavin, n 50 above, 218.

⁶² See, eg, Grahl, n 54 above, 34; J Stiglitz, ‘Towards a Better Measure of Well-being’ in Financial Times, 13 September 2009.

⁶³ See Keynes’ letter to TS Elliot in Moggridge, DE (eds), The Collected Writings of John Maynard Keynes: Activities 1940–1946. Shaping the Post-War World: Employment and Commodities vol 27 (London, Macmillan, 1980) 384 Google Scholar: ‘the full employment policy by means of investment is only one particular application of an intellectual theorem. You can produce the result just as well as by consuming more or working less … How you mix up the three ingredients of a cure is a matter of taste and experience, ie of morals and knowledge’.

⁶⁴ See Keynes, JM, ‘The General Theory of Employment’ (1937) 51 Quarterly Journal of Economics, 209 CrossRefGoogle Scholar; Keynes, , The General Theory of Employment, Interest and Money (London, Macmillan, 1973)Google Scholar, also available at: www.isn.ethz.ch.

⁶⁵ Ibid, 9.

⁶⁶ Slavin, n 50 above, 258.

⁶⁷ Ibid, 262.

⁶⁸ Kirchgässner, n 37 above, 462.

⁶⁹ On government spending, Keynes argued: ‘quantity is more relevant than quality. Even if the government employed some people to dig holes and others to fill up those holes’ see, eg, Slavin, n 55 above, 368.

⁷⁰ Ibid, 268.

⁷¹ Tymoigne, n 12 above, 100.

⁷² Macroeconomics describes the saturation of markets through the innovation theory where economic downturn continues until a new innovation takes hold. Another endogenous theory focuses on psychological factors whereas optimism triggers investments in plants, more jobs and consumer spending.

⁷³ Kregel, n 18 above, 237.

⁷⁴ Another suggestion has been to create a mechanism by which Member States with a current account deficit could devalue in real terms and other Member States with a surplus could revalue.

⁷⁵ Kirchgässner, n 37 above, 462.

⁷⁶ Karl Otto Pohl, former president of the German Bundesbank once said: ‘Inflation is like toothpaste. Once it is out of the tube, it is hard to get it back again’. Hyperinflation happened in Germany after World War I when prices rose 10% an hour: see, eg, Slavin, n 50 above, 240.

⁷⁷ OECD 1998, Economic Outlook, Paris, June 1998 which shows how corporate tax rate fell by 10.3% compared to 12.4% which corresponds to the fall of the average top marginal income.

⁷⁸ LJ Peter, Peter’s Quotations: ‘An economist is an expert who will know tomorrow why the things he predicted yesterday didn’t happen today’.

⁷⁹ It will be inferred from a rate of inflation which is close to that of the three best performing Member State.

⁸⁰ Source: EU Commission, Towards More Responsibility and Competitiveness in the European Financial Sector, 2012.

⁸¹ Eurostat, euro indicators, press release 123/2013, 16 August 2013.

⁸² The largest increase to the euro area (‘Eurozone’) annual inflation is said to come from fruit, vegetables and tobacco.

⁸³ European Commission, ‘EU Employment and Social Situation’ (2013) Quarterly Review 5. Other high unemployment rates were recorded in Bulgaria (–4.9%), Cyprus (–4.8%) and Spain (–4.5%).

⁸⁴ Ibid, 6.

⁸⁵ The youth unemployment rate ranges from 15% or more in Austria, Denmark, Germany and the Netherlands to 55% or more in Greece and Spain. Highest unemployment rates were registered in Greece (–6.5%) and Portugal (–4.3%).

⁸⁶ Ibid, 15.

⁸⁷ Ibid, 24.

⁸⁸ Ibid, 28.

⁸⁹ Ibid, 30.

⁹⁰ Ibid, 66.

⁹¹ Ibid, 58.

⁹² See, eg, Doleys, T, ‘Managing State Aid in a Time of Crisis: Commission Crisis Communications and the Financial Sector Bailout’ (2012) 34 Journal of European Integration 549 CrossRefGoogle Scholar.

⁹³ See the insightful contributions on soft law of Stefan, O, Soft law in court: competition law, state aid and the Court of Justice of the European Union (Kluwer Law International, 2013)Google Scholar; ‘Hybridity before the court: a hard look at soft law in the EU competition and state aid case law’ (2012) 37 European Law Review 49.

⁹⁴ Nicolaides, P, ‘State aid’ in Kokkoris, I and Olivares-Caminal, R (eds), Antitrust Law amidst Financial Crisis (Cambridge, Cambridge University Press, 2010)Google Scholar.

⁹⁵ Lyons, B and Zhu, M, ‘Compensating Competitors or Restoring Competition? EU Regulation of State Aid for Banks during the Financial Crisis’ (2013) 13 Journal of Industrial Competition & Trade 47 Google Scholar.

⁹⁶ Quigley, n 5 above, 240.

⁹⁷ Ibid.

⁹⁸ Source: DG COMP at: ec.europa/competition/recovery/financial_sector.html. See, eg, J Pisani-Ferry and A Sapir, ‘EU banking policies’ (2010) Economic Policy 358, who reported that by the end of August 2009 state aid measures amounted to 44% GDP.

⁹⁹ See http://epp.eurostat.ec.europa.eu/portal/page/portal/eurostat/home/.

¹⁰⁰ Slavin, n 50 above, 262.

¹⁰¹ Several economists argued that countries facing insolvency should default as quickly as possible to allow a substantial debt restructuring aimed at restoring sustainable debt levels. The UK government spent $856 billion to support the crisis in 2008 see, eg, Clarke, n 60 above, 44.

¹⁰² Source: European Commission, MEMO/12/413, Brussels 6 June 2012.

¹⁰³ Thus Moseley reported US$700 billion for US banks bailouts see, eg, Moseley, F, ‘The Bailout of the ‘Too-Big-to-Fail’ Banks: Never Again’ in Wolfson, and Epstein, (eds), n 2 above, 645 Google Scholar.

¹⁰⁴ See, eg, Macdonald, R, ‘The Nature and Effects of the 2007–2010 Crisis and Ways to Resolve it’ in MacDonald, , Genesis of the Financial Crisis (London, Palgrave Macmillan, 2012)CrossRefGoogle Scholar.

¹⁰⁵ See especially Sun, et al (eds), n 15 above.

¹⁰⁶ Vives, n 22 above, 482.

¹⁰⁷ Scherer, n 20 above, 10.

¹⁰⁸ For example, the US Dodd-Frank Act of July 2010 prohibited any merger or acquisition which results in a combined market share of more than 10% of domestic deposits. This Act aims to protect the American taxpayer by ending bail-outs and consumers from abusive financial services practices.

¹⁰⁹ Vives, n 22 above, 485.

¹¹⁰ Lyons and Zhu, n 95 above, 49.

¹¹¹ Ibid, 51.

¹¹² European Central Bank (2006 and 2008), ‘EU Banking Structures’, Frankfurt am Main.

¹¹³ See Stucke, n 14 above, 318 who points at the post-merger consolidated assets of $751 bn; Markham, n 19 above, 291 pinpointing that between 1980 and 1999, the number of commercial banks declined from 15000 to just 9000; Shelanski, HA, ‘Enforcing Competition During an Economic Crisis’ (2010/2011) 77 Antitrust Law Journal 238 Google Scholar.

¹¹⁴ MH Wolfson, ‘An Institutional Theory of Financial Crisis’, n 2 above, 183.

¹¹⁵ Akinbami, n 31 above, 23.

¹¹⁶ Communication from the Commission—The Application of State Aid Rules to Measures Taken in Relation to Financial Institutions in the Context of the Current Global Financial Crisis, [2008] OJ C270/8, departs from its predecessor EC Guidelines on State Aid for Rescuing and Restructuring Firms in Difficulty, [2004] OJ C244/2. The latter allowed the EC to distinguish among guarantees, recapitalizations, impaired assets measures, as aid modalities, and their recipient, distressed firms. The Banking Communication made possible the authorisation of state aid in the form of guarantees, capital, asset relief or liquidity on a non-discriminatory basis, for a limited time and scope see, eg, Quigley, n 5 above, 239.

¹¹⁷ Doleys, n 92 above, 556.

¹¹⁸ Ibid, 558.

¹¹⁹ Communication from the Commission—The Recapitalisation of Financial Institutions in the Current Financial Crisis: Limitation of Aid to the Minimum Necessary and Safeguards against Undue Distortions of Competition, [2009] OJ C10/2.

¹²⁰ See T Franchoo and M Pollard, ‘The Application of European Competition Law in the Financial Services Sector’ (2012) Journal of European Community Law & Policy.

¹²¹ Communication from the Commission on the Treatment of Impaired Assets in the Community Banking Sector, [2009] OJ C72/01.

¹²² Quigley, n 5 above, 239.

¹²³ Ibid.

¹²⁴ Commission Communication, The return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules, [2009] OJ C195/9.

¹²⁵ Quigley, n 5 above, 239.

¹²⁶ Commerzbank case (State aid No N 625/2008); see, eg Heimler and Jenny (n 52 above, 364) criticisms on the imposition by the Commission of limitations on managers’ compensation and severance packages.

¹²⁷ Doleys, n 92 above, 561.

¹²⁸ Prior to its takeover, HBOS was collapsing because of its high-risk lending practices and excessive use of leverage. See Marsden, P and Kokkoris, I, ‘The Role of Competition and State Aid Policy in Financial and Monetary Law’ (2010) 13 Journal of International Economic Law 889 CrossRefGoogle Scholar.

¹²⁹ Figures are slightly contradicted by R Tomasic, ‘The failure of corporate governance and the limits of law: British banks and the global financial crisis’ in Sun et al (eds), Corporate Governance and the Global Financial Crisis n 15 above, 59, relying on the House of Commons Treasury Committee, ‘Banking Crisis: Dealing with the Failure of the UK Banks: Seventh Report of Session 2008–09’, London, 519.

¹³⁰ The UK government has recently sold part of its 43.5% equity ownership.

¹³¹ Vives, n 22 above, 493. However, Lloyds was not allowed to take over Abbey in 2001.

¹³² Quigley, n 5 above, 245; see also Marsden and Kokkoris, n 128 above, 877.

¹³³ Lyons and Zhu, n 95 above, 45.

¹³⁴ Ibid, 47.

¹³⁵ See Scherer, FM, ‘A Perplexed Economists Confronts “Too Big to Fail”‘ (2010) 7 European Journal of Comparative Economics 267 Google Scholar.

¹³⁶ For an overview of decisions and ongoing in-depth investigations in the context of the financial crisis see European Commission, Brussels, 20 December 2012, available at: http://europa.eu/rapid/press-release_MEMO-12-1018_en.htm.

¹³⁷ The state aid was said to be incompatible with the restructuring communication as it exceeded the real economic value of this bank’s assets.

¹³⁸ See also Lyons and Zhu, n 95 above, 54 on WestLB.

¹³⁹ On Fortis case see, eg, Pisani-Ferry and Sapir, n 98 above, 354.

¹⁴⁰ On unsustainable business models see, eg, Lyons and Zhu, n 95 above, 58.

¹⁴¹ See, eg, Marsden and Kokkoris, n 128 above, 881.

¹⁴² Stucke, n 14 above, 322.

¹⁴³ See also Heimler and Jenny, n 52 above, 358, both of whom are critical on restructuring aid being offered to ‘inefficient firms to remain active in the market’.

¹⁴⁴ EC, ‘State aid: Commission adapts crisis rules for banks’, IP/13/672, Brussels, 10 July 2013.

¹⁴⁵ Bloomberg, J Brunsden and E Duarte, ‘EU to Toughen Creditor-Loss Rules at Failing Banks’, 8 July 2013, at: www.bloomberg.com/news/print/2013-07-08, reported that the EU has spent €1.7 trillion on the basis of the TBTF doctrine.

¹⁴⁶ In contrast, architectural differences did not allow the US antitrust enforcers to administer bail-outs through means of antitrust policy see, eg, American Antitrust Institute, Remarks of Bert Foer, ‘Competition Policy and “Too Big” Banks in the European Union and the United States’, 27 June 2013.

¹⁴⁷ Source: EurActiv, ‘New banking authority pits Commission against Berlin’, 11 July 2013 available at: www.euractiv.com/euro-finance/new-banking-resolution-authority-news-529225.

¹⁴⁸ Wibbels, E, ‘Bailouts, Budget, and Leviathans: Comparative Federalism and Lessons from the Early United States’ (2003) 36 Comparative Political Studies 486 CrossRefGoogle Scholar.

¹⁴⁹ Ibid, 487.

¹⁵⁰ To quote Bailey’s, David excellent article on ‘Publicly Distancing Oneself from a Cartel’ (2008) 31 World Comparative Law & Economics Review 177 Google Scholar.

¹⁵¹ See the Commission’s ‘new’ mission: ‘Competition law should ensure that credit institutions and other financial service providers do not behave in a manner that hampers the efficient functioning of the internal market’, available at: http://ec.europa.eu/competition/sectors/financial_services/capital_markets.html.

¹⁵² See generally n 15 above, 9.

¹⁵³ Clarke, T, ‘Corporate governance causes of the global financial crisis’ in Sun, et al (eds), Corporate Governance and the Global Financial Crisis n 15 above, 31 Google Scholar.

¹⁵⁴ Braithwaite, JP, ‘Standard Form Contracts as Transnational Law: Evidence from the Derivatives Markets’ (2012) 75 Modern Law Review 783 CrossRefGoogle Scholar.

¹⁵⁵ Ibid, 785, 789. Five firms dominate the EU and US OTC derivatives market, see Scherer, n 20 above, 14.

¹⁵⁶ Epstein, GA and Habbard, P, ‘Speculation and Sovereign Debt: An Insidious Interaction’, in The Handbook of the Political Economy of Financial Crisis, n 2 above, 328 Google Scholar.

¹⁵⁷ Ibid.

¹⁵⁸ P Lysandrou, ‘Hedge funds’, in Lysandrou, P, ‘Hedge funds’, in Handbook of Critical Issues in Finance, n 12 above, 145 Google Scholar.

¹⁵⁹ See, eg, Brummer, n 26 above, 212.

¹⁶⁰ Ibid, 784.

¹⁶¹ See also Keys, BJ, Mukherjee, TK, Seru, A and Vig, V, ‘Did Securitization Lead to Lax Screening? Evidence from Subprime Loans’ (2010) 125 Quarterly Journal of Economics 307 CrossRefGoogle Scholar; Krishnan, S, ‘Securitization’, in Handbook of Critical Issues in Finance, n 12 above, 290 Google Scholar.

¹⁶² Hedge funds are collective investments with a wide range of objectives, strategies, styles, techniques and assets, normally open to selected institutions.

¹⁶³ For example, Standard & Poor’s, Moody’s and Fitch.

¹⁶⁴ Source: Communication from the Commission on the application of State aid rules to support measures in favour of banks in the context of the financial crisis, [2011] OJ C356/02. The guarantee fee should be the sum of a basic fee, a risk-based fee and a risk metric composed using the following formula: the guarantee fee=40bp x (1+ (1/2 x A/B) + (1/2 x C/D)), where A is the beneficiary’s median five-year senior CDS spread; B is the median iTraxx Europe Senior Financials five-year index; C is the median five-year senior CDS spread of all Member States; D is the median five-year senior CDS spread of the Member State granting the guarantees. In other words, the risk profile in recapitalisation state aid is measured through the media fiveyear senior debt CDS spread.

¹⁶⁵ EC, IP/13/630, Brussels, 1 July 2013. The 13 banks are Merrill Lynch, Barclays, Bear Stearns, Paribas, Citygroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Morgan, Morgan Stanley, RBS, UBS and ISDA.

¹⁶⁶ EC, IP/13/286, Brussels, 26 March 2013.

¹⁶⁷ Taub, JS, ‘What We Don’t Talk About When We Talk About Banking’, n 2 above, 457 Google Scholar.

¹⁶⁸ See EC, Directorate-General for Internal Policies, Policy Department Economic and Scientific Policy, Economic and Monetary Affairs, ‘Note on Shadow Banking-Minimum Haircuts on Collateral’ 2013, 56.

¹⁶⁹ Crotty, n 29 above, 153.

¹⁷⁰ Kregel, n 18 above, 160.

¹⁷¹ See Tymoigne, n 12 above, 99.

¹⁷² Fisher, I, ‘The debt-deflation theory of great depressions’ (1933) 1 Econometrica 337 CrossRefGoogle Scholar.

¹⁷³ Source: CNN MONEY, A Petroff, ‘Libor moving to NYSE Euronext’, available at: http://money.cnn.com/2013/07/09/investing/libor-nyse-uk. See C Lim, ‘Libor, Strategy, and International Cartel Investigations’ (2013) Journal of European Competition Law & Policy.

¹⁷⁴ See PDS Phillip and RP Girnys, ‘No Antitrust Injury in Libor Rate-Setting?—What Happened to Effects?’ (2012) Comparative Policy International 3.

¹⁷⁵ Established in Illinois Brick Co v Illinois 431 US 720 (1977).

¹⁷⁶ Following a ruling by Judge Naomi Reice Buchwald of the US District Court for the Southern District of New York.

¹⁷⁷ A Stephan, ‘Should Libor-Rigging be treated like Price Fixing?’ at: http://competitionpolicy.wordpress.com/2012/07/11/should-libor-rigging-be-treated-like-price-fixing; extremely interesting on crisis cartels, see Stephan, A, ‘Price Fixing in Crisis: Implications of an Economic Downturn for Cartels and Enforcement’ (2012) 35 World Comparative Law & Economics Review 511 Google Scholar.

¹⁷⁸ According to the Financial Ombudsman Service, it is ‘UK’s most complained about bank’.

¹⁷⁹ Source: The Guardian at: www.guardian.co.uk/business/2013/feb/05/barclays-1-billionmis-selling-compensation-bill.

¹⁸⁰ Clarke, B, ‘Where was the “market for corporate control” when we needed it?’ in Sun, et al (eds), Corporate Governance and the Global Financial Crisis, n 15 above, 77 Google Scholar.

¹⁸¹ Ibid, 78.

¹⁸² See EU Regulation no 236/2012 on Short Selling and certain aspects of credit default swaps, [2012] OJ L86/1.

¹⁸³ See EC, Press release IP/13/1208, Brussels, 4 December 2013; EC, Case AT39861, Yen Interest Rate Derivatives, not available yet. Further SOs were sent to Credit Agricole, HSBC and JPMorgan for suspected participation in Euro interest rate derivatives cartel, see EC, IP/14/572, Brussels, 20 May 2014, and to ICAP for its suspected participation in yen interest rate derivatives cartels, see EC, IP/14/656, Brussels, 10 June 2014.

¹⁸⁴ See an encouraging prospect by Chancellor George Osborne, available at: www.guardian.co.uk/business/2013/feb/04/george-osborne-investment-banks-warning; www.guardian.co.uk/business/video/2013/feb/04/george-osborne-banking-reforms-video.

¹⁸⁵ Bush, D, ‘Too Big to Fail: The Role of Antitrust in Distressed Industries’ (2010) 77 Antitrust Law Journal 277 Google Scholar; Mateus, A, ‘“Too Big to Fail”: Banking Regulatory Reform and What Still Needs to be Done’ (2011) 7 Comparative Policy International 22 Google Scholar; Markham, JW, ‘Lessons for Competition Law from the Economic Crisis: The Prospect for Antitrust Responses to the “Too Big to Fail” Phenomenon’ (2011) 16 Fordham Journal of Corporate & Financial Law 261 Google Scholar. The concept of TBTF was first applied in 1914 by Treasury Secretary, William Gibbs McAdoo, to rescue the municipal government of New York City.

¹⁸⁶ Against TBTF see, eg, LH Rockwell: ‘Don’t Bail Them Out’, 10 September 2008: ‘What should have happened in 1929 is precisely what should happen now … The government should completely remove itself from the course of action and let the market re-evaluate resource values’, available at: http://mises.org/daily/3104; F Shostak, ‘The Rescue Package Will Delay the Recovery’, 29 September 2008: ‘The government package is not going to rescue the economy, but it will rescue activities that the economy cannot afford and that consumers do not want. It will sustain waste and promote inefficiency’, at: http://mises.org/daily/3131.

¹⁸⁷ On the US deregulation of swaps markets see Greenberger, M, ‘Derivatives in the Crisis and Financial Reform’, in Krugman, and Wells, , Macroeconomics, n 2 above, 473 Google Scholar, through the Commodity Futures Modernization Act of 2010 which removed OTC derivatives transactions from exchange trading and clearing requirements.

¹⁸⁸ See, eg, Bonefeld, W, ‘Freedom and the Strong State: On German Ordoliberalism’ (2012) 17 New Political Economy 635 CrossRefGoogle Scholar.

¹⁸⁹ Ibid, 639.

¹⁹⁰ Rüstow, A, ‘General Social Laws of the Economic Disintegration and Possibilities of Reconstruction’ in Afterword to Röpke, W International Economic Disintegration (London, W Hodge, 1942)Google Scholar; Röpke, W, A Human Economy (Wilmington Delaware, ISI Books) 1998 Google Scholar.

¹⁹¹ Rüstow, 276.

¹⁹² Eucken, W, ‘Staatliche Strukturwandlungen und die Krise des Kapitalismus’ (1932) 36 Weltwirtschaftliches Archiv 297 Google Scholar.

¹⁹³ Bonefeld, n 188 above, 647.

¹⁹⁴ Vanberg, V, ‘“Ordungstheorie” as Constitutional Economics, The German Conception of a “Social Market Economy”‘ (1988) 39 ORDO 26 Google Scholar.

¹⁹⁵ Röpke, W, Crisis and Cycles (London, W Hodge, 1936) 160 Google Scholar.

¹⁹⁶ Duménil, G and Lévy, D, Capital Resurgent: Roots of the Neoliberal Revolution (Cambridge MA, Harvard University Press, 2004)Google Scholar.

¹⁹⁷ See, eg, O’Connor, n 51 above, 694.

¹⁹⁸ See, eg, Oliver, HM, ‘German Neoliberalism’ (1960) 74 Quarterly Journal of Economics 128 Google Scholar on the use of Keynesian measures to combat unemployment regarded as ‘foolish’ by German neoliberals.

¹⁹⁹ Ibid, 695.

²⁰⁰ Ibid, 696.

²⁰¹ Ibid, 697; see also O’Connor, J, From Welfare Rights to Welfare Fights: Neoliberalism and the Retrenchment of Social Provision (Mimeo MA, University of Massachusetts, Amherst, 2002)Google Scholar.

²⁰² OECD, ‘Open Markets Matter’, Paris, 1998.

²⁰³ Genschel, P, ‘Globalization and the welfare state: a retrospective’ (2004) 11 Journal of European Public Policy 619, 623CrossRefGoogle Scholar.

²⁰⁴ Ibid.

²⁰⁵ See Stockhammer, E, ‘Financialization’, in Sun, et al (eds), Corporate Governance and the Global Financial Crisis, n 15 above, 124 Google Scholar.

²⁰⁶ Oliver, n 198 above, 144.

²⁰⁷ Attributed to Krugman, P, ‘The return of depression economics’ (1999) 78 Foreign Affairs 56 CrossRefGoogle Scholar.

²⁰⁸ Cozzi, G, ‘Capital controls’, in Sun, et al (eds), n 15 above, 27 Google Scholar.

²⁰⁹ On the other hand, O’Connor, n 51 above, 704, reminds us that ‘even elite migrant workers are more likely to sell their labour power at a lower price and work in poor conditions’, much of which is experienced in real life. Generally on fundamental freedoms see Barnard, C, The Substantive Law of the EU: The Four Freedoms, 3rd edn (Oxford, Oxford University Press, 2010)Google Scholar.

²¹⁰ Before the breakdown of Bretton Woods in 1971 it is said that only 10% of foreign exchange transactions were purely speculative.

²¹¹ See also O’Connor, n 51 above, 702.