Competition vs. Financial Stability in the Aftermath of the Crisis in the UK

Abstract

The article addresses the status quo of competition enforcement during financial crises and presents the balance between competition law and financial stability during the recent crisis. The debate of the balance between competition and financial stability remains at the forefront. On the one hand, it seems plausible to expect that, once a certain threshold is reached, an increase in the level of competition will tend to increase risk-taking incentives and the probability of bank failure. On the other hand, competition cannot be eliminated in the financial services sector because it ensures efficiency, a broader range and higher quality of products to final consumers, innovation, and lower prices.