Bank

 Bank and Competition do not mix. It is not so much that the banks would act as repeat offenders on which the competition authorities should raise the tone by increasingly heavy penalties so that the competitive lesson is finally heard. It is rather two orders confronting each other, two incomprehensions face to face. Indeed, the banks find it appropriate to agree in order for the banking system to function. Moreover, governments demand them political behavior by financing the economy when the economy does not rely on financial markets. Hence, how would they themselves behave in a market consisting of selfish behavior and aggression towards their counterparts? If we plunge into this melting pot of incomprehension that engenders the violent clash between the banks, which evoke their mission, even their duty, and the competition authorities which avail themselves of theirs, we run into the pitfall of the definition even of what a bank is. It can be estimated that a bank is a provider of various services, operating in competing markets. In this perspective, the law ensures the proper functioning, the authorities that keep the efficiency of the markets seizing the banks that carry out their activities. But if we choose to insist that banks are what make the economy work and strengthen the social bond, then they are an integral part of their own system: the banking system. Moreover, the latter is an essential element of society, a perspective in which competition is merely contiguous. The more Europe manages to build banking Europe, the more it elaborates a mechanism for resolving difficulties, the more the bank is above all a matter of State and not of financial markets. In what is the political course of the history of peoples, competition ceases to be its first measure. It is therefore necessary to start from the undisputed existence of banking markets and the competitive mechanism which the law correlates with (I)). But the scale of the resistance reveals that it seems to have intentionally or not to have passed on the elementary and the essential: the very definition of what is a bank II. If it is accepted that the bank is the operator of the banking system, which fuels the economy as a whole, then competition law has only an adjacent role and can not constitute its backbone (III). The European Banking Union is demonstrating this.  

The expression "regulated company" may appear as an oxymoron : the State  regulates areas (markets, networks, etc.) because of their structural failures, but the State doesn't enter a company that develops its activities autonomously. But on reflection, it is sometimes necessary to "regulate a company" and this necessity is increasingly imposed. This is imperative if a company absorbs the entire area, because it is a monopoly or because it wants to become the heart of a crucial area, such as Google which has the project to become the future global brain. In a more general way, it is a necessity to  locate businesses which are "crucial", banks are only one example, and organize, beyond supervision, providing direct regulation of such firms. This regulatory power on critical firms must take the form of attendance of public power and policy within the company itself, so that the state interfere in decisions which social group suffers the consequences. The control can go beyond this "public presence" to take the form of "public authority", the state ruling as operator. Under such conditions of "cruciality", the neutralization of "public enterprise" by the competition law must cease, the public company must be better recognized as a regulatory instrument in distance with the simple game of competition.

This working paper was prepared as a basis for a contribution to a forthcoming volume of the collection Le rapport moral de l'Argent dans le Monde ( The Moral Report of Money in the World). It develops the idea that everyone has the impression that the law is more powerful than ever in banking and financial regulation: Law invades everything and appears in its most terrible form that is criminal and repressive administrative law. It seems that the beginning of everything is Law ! But in reality, we must consider that the law is weaker than ever. Indeed, if the law of banking and financial regulation has become primarily repressive, it is because it is weak. It took the form of a multitude of microscopic rules and  punishment is only lending its force to any prescription. Repression has lost its autonomy, and has become a sort of simple enforcement of civil multiple rules. Moreover, the legislation degenereted into regulations. The Regulation goes into a random pile of incomprehensible and complexe requirements. On the contrary, the operators would need a law that fixed in advance and clearly a few strong lines of conduct. So it is a weak and shoddy law which the banking and financial regulators are building for the future. It will be severe only because it will be weak and  poorly done. The lawyer will be be as chagrined as the financier is.

Documents loi_26_juillet_2013.pdf

Translated Summaries The translated summaries are done by the Editors and not by the Authors. ENGLISH Prudential regulation applied to banks is caught swinging back and forth between two objectives. FRENCH La réglementation prudentielle appliquée aux banques oscille constamment d’un objectif à l’autre.

Translated Summaries In The Journal of Regulation the summaries’ translation are done by the Editors and not by the authors ENGLISH Interchange fees set by the main credit/debit card associations play an important role in the retail banking sector, however they remain largely invisible to consumers.   FRENCH Les frais d’interchange fixés par les principales associations de cartes de crédit jouent un rôle important dans le secteur des services bancaires de détail, mais ils restent largement invisibles pour les consommateurs. SPANISH Tasas de intercambio establecidas por las asociaciones principales de tarjetas de crédito/débito juegan un rol importante en el sector de negocio de bancario minorista. No obstante, permanecen por la mayor parte invisibles a los consumidores. ITALIAN Le commissioni interscambio su carte di credito/debito fissate dalle principali associazioni giocano un ruolo importante nel settore dell’attività bancaria al dettaglio, tuttavia sono ancora poco visibili ai consumatori. ARABIC  رُسوم التبادُل التي وُضِعت مِن طرفِ جمعيات بطاقة الائتمان لها دورُ أساسي في مَجال المصرفية للخدمات الافرادية, لكِنَّ بقِيت هذِهِ الرُّسُوم غيرُ ظاهِرة لِكثِير المُستهلِكين.  ……………… Other translations forthcoming.  

Translated Summaries In The Journal of Regulation the summaries’ translation are done by the Editors and not by the authors ENGLISH While financial regulation aims at achieving market stability, regulating markets can sometimes take an ironic turn when regulations end up having consequences that differ from their original regulatory purpose. The article provides such an example of regulation’s irony: how a regulatory change in Germany led Moody’s to downgrade 12 banks, therefore weakening such institutions and consequently enhancing the current issues of market volatility and credit cost.   FRENCH Bien que la réglementation financière vise à assurer la stabilité du marché, la régulation des marchés peut parfois prendre une tournure ironique quand la régulation finit par avoir des conséquences qui diffèrent de son objectif de régulation d’origine. L’article fournit un exemple de l’ironie de la régulation : comment un changement de réglementation en Allemagne a conduit Moody’s à déclasser 12 banques allemandes,, donc à affaiblir ces institutions et par conséquent à accroître les problèmes actuels de la volatilité du marché et le coût du crédit. ITALIAN Quando la regolazione è volta ad ottenere la stabilità del mercato, l’evoluzione di questi mercati oggetto di tale regolazione può essere particolarmente ironica quando la regolazione ha delle conseguenze ben differenti da quelle originariamente prepostesi. Questo articolo cerca quindi di mettere in evidenza un esempio di questa ironia: in effetti, un cambio di regolatore in Germania ha portato Moody’s a tagliare il rating di 12 banche, indebolendo ancora di più tali istituzioni ed aumentando si conseguenza le questioni relative alla volatilità del mercato e del costo del credito. ………………….. Other translations forthcoming

Full reference: Bon-Michel, B., La cartographie des risques : de la rationalisation du futur à l'apprentissage du risque. Cas de l'identification du risque opérationnel au sein d'un établissement de crédit (Risks Mapping: from Rationalization of the Future to Risk Learning. Case of the Identification of the Operational Risk in a Credit Establishment), Management & Avenir, vol. 48, no. 8, 2011, pp. 326-341. Sciences Po's students can read this article in the Sciences Po Drive in the folder MAFR – Regulation & Compliance 

Translated Summaries ENGLISH The subject of neutrality brings to my mind a certain number of preliminary ideas and reminiscences. First of all, the image of Buddha comes to mind, because it alone expresses the extent to which neutrality is an endless subject, since by thinking about the fact that he isn’t thinking about anything, Buddha is still thinking about something. It also makes me think of contemporary music’s constant attempts to attain a form of neutrality: yet this goal remains unattainable, because it is evident that the search for the neutral, in a sound or a timbre, can probably never be found.   FRENCH Tout d’abord, la figure du Bouddha, qui exprime à elle seule combien la question de la neutralité est un thème sans fin, car en pensant qu’il ne pense à rien, le Bouddha pense malgré tout à quelque chose. Il me fait penser aussi à la musique contemporaine, à son souci constant d’atteindre une forme de neutralité ; préoccupation à jamais déçue lorsqu’elle reconnaît ultimement que le neutre, en ayant toujours une qualité – un son, un timbre – est probablement introuvable.   SPANISH El principio de los estándares de la neutralidad (el ejemplo de estándares de contabilidad) El tema de la neutralidad trae a luz un cierto número de ideas preliminares. Para comenzar, la figura de Buda viene a mente, porque él sólo expresa la naturaleza interminable que es el tema de la neutralidad, ya que al pensar en el hecho de que él no piensa en absolutamente nada, Buda aún así piensa en algo. También me hace pensar el intento constante de la música contemporánea de alcanzar una forma de neutralidad: pero este objetivo permanece inalcanzable, porque es evidente que la búsqueda de lo neutral, en un sonido o un timbre, probablemente nunca se podrá encontrar. ………………… Other translations forthcoming.