This article examines the role of antitrust and competition policy in regulation of large banks made fragile by the financial meltdowns of 2007–09. We compare crisis-related regulation in the European Union and the United States and find that in the European Union, competition policy experts played a key role in applying crisis-related financial regulation, but in the United States they did not. Consequentially, the European Union avoided making banks bigger as a side effect of making weak banks stronger. In the United States, bank consolidation was encouraged. We argue that in the United States, policies to preserve competition should be given a more significant role and made part of an on-going plan that will apply even in a time of crisis. At minimum, the Antitrust Division of the Justice Department should be promptly consulted by the prudential regulators of financial institutions on all matters likely to substantially affect the structure of the financial services industry, including market power issues.
scite is a Brooklyn-based organization that helps researchers better discover and understand research articles through Smart Citations–citations that display the context of the citation and describe whether the article provides supporting or contrasting evidence. scite is used by students and researchers from around the world and is funded in part by the National Science Foundation and the National Institute on Drug Abuse of the National Institutes of Health.