Common Ownership Patterns in the European Banking Sector—The Impact of the Financial Crisis1

We provide a description of ownership patterns in the top 25 European banks for the period 2003–2015, where we especially focus on the global financial crisis. Investment managers, such as Blackrock, are dominant in terms of number of blockholdings in different banks, maintaining fairly stable “common ownership” networks throughout our sample. However, the financial crisis led to capital injections by governments in several banks in trouble, which in turn led to a jump in holdings by governments, which typically are “non-common owners” (i.e., they hold only shares in only one bank). This jump translated into these investors temporarily being the top investor with a large share, and non-common owners being the majority among large shareholders. A brief comparison with US banks uncovers large ownership differences between the European and US banking sectors. We briefly discuss what these ownership patterns might imply for competition, stability and performance in the banking industry.

On the Risks of Using the Sequential Product-Level SSNIP Approach to Identify Relevant Antitrust Markets‡

In a recent influential paper Coate et al. (2021) have criticized the sequential product-level approach to market definition in merger review. They argue that a simultaneous market-level approach to critical loss is more appropriate than a product-level critical loss analysis, because under certain plausible demand scenarios (nonlinear demand functions) the latter could yield the wrong answer on market definition—i.e., excessively broad or narrow markets. We extend their analysis by showing that a sequential product-level approach actually leads to an excessively narrow market definition when the typical nonlinear demand functions used in merger analysis are employed.

Leniency and Damage Liability for Cartel Members in Brazil

A recent debate on leniency policies is the interplay between the public and the private competition law enforcement. The lack of a well-established set of rules regarding damage claims may be harming the effectiveness of the Brazilian Leniency Program, either by discouraging the wrongdoers from applying for leniency in already formed cartels or by not being threatening enough to deter the cartel formation. The paper objective is to analyze the best policies for leniency applicants regarding the damage liability in Brazil. We conclude that the optimal policy is providing immunity to the leniency applicant, and after that the damage claim lawsuits can be encouraged with no undesirable effects. Extensions confirm the following: the immunity is even more effective when there is risk of betrayal; the immunity is the best policy in the case of ex-post leniency; the immunity is the optimal policy when there is no bankruptcy, otherwise the applicant liability should be the minimum necessary to avoid the bankruptcy; immunity regarding criminal sanctions for individuals is the optimal policy; for international cartels, the optimal policy is a combination of immunity regarding damage claims in all jurisdictions. JEL codes: L13; L41; L44

Tracking The Price of Almonds in Spain1

I look for signs of manipulation of the price of almonds in the markets of Albacete, Murcia, and Reus in Spain. To that end, I use Benford’s Law to analyze the distribution of the second and third digits of the price of almonds. I find that prices in the Albacete and Reus markets deviate from Benford’s Law, especially for the third digit, and those in the Murcia market deviate from Benford’s Law for the second digit but not for the third digit. I therefore find signs that the price of almonds in the Spain’s main markets is being manipulated.