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The Impact of the European Union Current Crisis on Law, Policy and Society

Published online by Cambridge University Press:  27 October 2017


This chapter aims to understand the general nature of the current economic crisis from a socio-legal, economic, ideological and political perspective and to analyse the complexity of the multiple causes which have led to this crisis. The impact of the crisis on different areas of law is also considered, especially on banking, securities, contract, competition and corporate law. Furthermore, the article aims to criticise law in action and the management of the crisis through political decision-making (state intrusiveness), that is, the various responses and reactions to the crisis and the effectiveness of the measures implemented by policy-makers and enforcers. In particular, this article questions the constitutional legitimacy of the TBTF (Too-Big-to-Fail) theory as a predominant doctrine and criterion of state intervention in the economy. The chapter carries out a multi-layered analysis that covers aspects of economic, social, and political governance. It also draws insights from microeconomics—looking at how economic agents have affected individuals such as consumers—and from macroeconomics—looking at how state intervention in the economy has impacted upon taxpayers and considering the economic and social costs of the crisis. Finally, it approaches the crisis from the perspective of political economy by looking through the lenses of ideology and policy and by reflecting on the role of neoliberalism today.

Research Article
Copyright © Centre for European Legal Studies, Faculty of Law, University of Cambridge 2014

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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.

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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.

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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:

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.

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44 Padilla, A and Pagano, M, ‘Sharing default information as a borrower discipline device’ (2000) 44 European Economic Review 1951–80 CrossRefGoogle Scholar.

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:

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.

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:

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:, 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:

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:

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: 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:; 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’.

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.

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:; 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:

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.