Integration of EU banking markets, The

The goal of this paper is to provide an assessment of the EU policies that pursue the creation of a single banking market. The paper evaluates the degree of integration of EU banking markets, the impact of the integration process on the conduct, the structure and the performance of the industry at the EU level, and discusses whether current policies are the most appropriate instruments for market integration. After comparing the key features of EU policy with alternative methods of market opening, the analysis stresses that market opening in regulated markets such as banking faces a difficult trade-off between respect for domestic preferences and the elimination of regulations that protect local competitors and are not justified on efficiency grounds. The paper also provides an overview of recent research which has looked at different indicators of market integration in EU banking. Finally, it analyzes the impact of integration policies on the conduct, the structure and the performance of the banking industry. The conclusion provides an integrative assessment, summarizing the key results of the paper and evaluating the extent to which the changes in the degree of integration and the performance of the industry imply that the EU single market policies have achieved their objectives.integration policies; banking industry; European Union; market integration; regulated markets; market structure; single market;

Deregulation, integration and market structure in European banking

This paper analyzes the impact of deregulation and market integration policies on the structure of European banking markets. It argues that whether European integration will lead to large increases in EU-wide concentration will depend on the extent to which competition in banking is based on endogenous sunk costs or, alternatively, on variable costs and exogenous sunk costs. The paper also highlights the role of own funds as a source of endogenous increasing returns. Finally, it proposes an empirical test of the dominant form of competition. This procedure is applied to data for eleven EU countries during the period 1981-1995.Deregulation; European banking markets;

Regulatory change in network industries: The Spanish experience

The 1990s witnessed significant regulatory changes in several Spanish network industries such as electricity, telecommunications, natural gas and oil. This article provides an assessment of these developments, trying to ascertain what goals policy-makers attempted to achieve with the deregulation process and to what extent the program has been successful.Desregulation nertworks telecoms electricity gas;

Industry characteristics and anti-competitive behavior: Evidence from the EU

In the EU, competition policy is based on three main pillars: antitrust, merger control and monitoring state aid. Our analysis focuses on antitrust policy. In this context, the Commission is concerned about restrictive agreements and practices that imply an abuse of market power. The objective of this paper is to analyze what are the main criteria used by the Commission when deciding on anti-competitive practices. In particular, our goal is to determine whether and to what extent the Commission takes into account economic analysis when deciding whether anti-competitive behavior has taken place. There is a very extensive industrial organization literature which provides the theoretical and empirical background that associates industry features with the likelihood of practices that restrict competition. However, the literature evaluating the competition authority's decisions is much scarcer and has focused mainly on the analysis of merger policy. Our paper contributes to fill this gap in the literature. We examine almost 2,000 cases submitted to the Commission for consideration from January 1999 to February 2004 with the aim of determining which industry characteristics led the Commission to decide against an investigated firm on antitrust grounds.Competition policy; Antitrust; European Commission; Mergers;

Vertical industrial policy in the EU: an empirical analysis of the effectiveness of state aid

This paper assesses the effectiveness of vertical industrial policies within the European Union. Vertical industrial policy is defined as government support of specific firms or industries ("picking winners" or "supporting losers"). It is measured as state aid granted by Member States to the manufacturing sectors, with the aim to analyse to what extent this government intervention affects the growth of multifactor productivity (MFP) in manufacturing. The analysis is conducted with both sectoral and horizontal aid, since in many cases vertical aid is disguised as aid pursuing horizontal objectives. Controlling for the potential endogeneity of state aid policy, the results indicate that vertical state aid contributes positively to MFP growth.Industrial policy; vertical support; multifactor productivity

Telecommunications policies: Measurement and determinants

This paper presents new data on telecommunications reform for a cross section of countries. We measure telecommunications reform along two dimensions: entry barriers and regulatory independence. This data set is combined with a comprehensive set of performance, institutional and political data to analyze the determinants of telecommunications policies. We find that entry barriers are positively associated with the degree to which countries have an interventionist legal tradition, but they are unrelated to the partisan ideology of reforming governments. We also find that countries with weak protection of investors' quasi-rents by other means, and countries with a larger incumbent are more prone to create independent regulatory agencies, although this last result is statistically weaker.Telecommunications policies; Liberalization; Regulation;

Telecommunications policies: Determinants and impact

This paper presents new data, in the form of four indices, on liberalization policies and the independence of regulators for a cross-section of countries. These indices are combined with a comprehensive set of performance, institutional and political data to analyze both the determinants and the impact of telecommunications policies. The authors find that liberalization policies are negatively associated with the degree to which countries have an interventionist tradition, but not with the partisan ideology of reforming countries per se. They also find that countries where the institutional endowment constrains less the behavior of the executive bodies, and countries with a stronger incumbent, are more prone to create truly independent regulatory agencies. There is weak evidence that the creation of independent regulatory agencies has a positive effect on network penetration when the endogeneity of regulatory independence is taken into account.telecommunications; liberalization; institutions;

La Paradoxa de la productivitat

Espanya presenta un problema seriós pel que fa a la productivitat. Per mitjà d'aquesta anàlisi de Jordi Gual, podrem veure com aquest fenomen afecta el nivell de renda per capita. En una situació així, les conseqüències que se'n deriven afecten el creixement i desenvolupament econòmics. Els resultats tan dolents que presenta Espanya dins d'Europa posen de manifest les nefastes gestions pel que fa a un bon progrés tecnològic, el qual explicaria un bon creixement en la productivitat espanyola. A més a més, un problema important del qual també es parla, possible causant de gran part del que succeeix, és el problema de l'evolució de la productivitat total dels factors.Spain has a serious productivity problem. Jordi Gual is going to show us how this phenomenon affects income per capita. The consequences are visible in economic growth and development. The consequences of such a situation affect economic growth and development. Spain’s poor performance in Europe reveal a poor management of technological progress, which would explain the good growth in Spanish productivity. Furthermore, another problem to be taken into account, and which will be addressed, is the problem with total factor productivity evolution

La competitivitat real de l'economia catalana davant la globalització

Aquest article, des del punt de vista de l'Observatori de Mercats Exteriors, comenta l'evolució de l'economia catalana en els propers anys. A més, en referència a la competència oberta entre empreses, es fa una reflexió al voltant de les actuals conseqüències de la globalització. Un altre dels conceptes que es fa palès en el text és el grau d'internacionalització de les empreses catalanes i les inversions que es fan amb l'exterior. A més, es fa una valoració d'altres opcions estratègiques fonamentades en la contractació de serveis o processos a tercers amb la intenció d'evitar costos que no surten rendibles d'assumir.This paper from the Foreign Markets Observatory gives its predictions about the development of the Catalan economy over the coming years. It also discusses the present consequences of globalisation in terms of the free competition between companies from all over the world. Another important aspect dealt with here is the internationalisation rate of Catalan companies and the development undergone by Catalonia’s foreign investment. Lastly, an evaluation is made of other strategic options based on outsourcing policies in which the main idea is to avoid spending money on unprofitable services or processes

Lliçons de la crisi: economia productiva vs. economia financera

Aquest article examina les característiques del sistema financer que tendeixen a accentuar les fluctuacions cícliques de l'economia i, en algunes ocasions, arriben a provocar bombolles d'actius i crisis financeres, com la que es va iniciar amb les hipoteques subprime nord-americanes el 2007. En primer lloc, es discuteixen alguns trets del negoci bancari que el fan inherentment cíclic. En particular, la competència per quota de mercat en moments d'expansió i les dificultats per avaluar els riscos al llarg del cicle. El gruix de l'anàlisi, tanmateix, se centra en els factors procíclics que es deriven del funcionament imperfecte dels mercats financers. Els seriosos problemes d'asimetria en la informació a la disposició dels diversos actors del sector—gestors, prestataris, creditors i propietaris— provoquen una tendència al palanquejament excessiu en èpoques de bonança i a polítiques massa restrictives en moments adversos del cicle. L'article examina, també, com aquests problemes d'informació units a efectes externs negatius entre entitats poden conduir a situacions extremes, de greus desequilibris en els mercats (bombolles i crisis). A més, es discuteix en quina mesura algunes de les regulacions actuals contribueixen a agreujar, en lloc de mitigar, el caràcter procíclic del sector. En la conclusió se suggereixen els principis que podria tenir en compte un marc regulador que contribuís a reduir la naturalesa procíclica del sistema financer.This paper examines the characteristics of the financial system that tends to accentuate economies’ cyclical fluctuations and, on occasion, ends up causing asset bubbles and financial crises, like the one that started in 2007 with the US subprime mortgages. The paper discusses, first, some features of the economics of banking that make it inherently cyclical. In particular, competition for market share at times of expansion and the difficulty in assessing risk throughout the cycle. However, the lion’s share of the analysis focuses on the procyclical factors that result from the imperfect functioning of financial markets. The serious problems of asymmetric information between the different agents in the industry – managers, borrowers, creditors and owners – result in a tendency towards excessive leverage during a boom and overly restrictive policies during downturns. The paper also examines how these problems of information, together with negative externalities between institutions, can lead to extreme situations of seriously unstable markets (bubbles and crises). It also discusses to what extent some of the current regulations help to exacerbate the sector’s procyclical nature instead of alleviating it. The conclusion proposes principles that might be taken into account by a regulatory framework that helps to reduce the procyclical nature of the financial system