‘Unsolicited sovereign ratings and the sovereign-bank ceiling: An unintended consequence of regulatory disclosure’

We can look forward to another debut performance at the CCP Seminar Series on Friday 29th January 2016, as the magnificent Patrycja Klusak (CCP & NBS) takes the stage to present ‘Unsolicited sovereign ratings and the sovereign-bank ceiling: An unintended consequence of regulatory disclosure‘ (joint work with Rasha Alsakka and Owain ap Gwilym at Bangor University). Patrycja recently joined the Norwich Business School as a Lecturer in Banking and Finance and became a CCP Faculty Member in January 2016. Her numerous research interests include: analysing the regulatory changes to the Credit Rating Agency (CRA) industry, empirical banking and applied econometrics. An abstract for Patrycia’s paper can be found below.

Abstract

This paper integrates three themes on regulation, unsolicited credit ratings, and the sovereign-bank rating ceiling. We reveal an unintended consequence of the EU rating agency disclosure rules upon rating changes, using data for S&P-rated banks in 44 countries between 2006 and 2013. The disclosure of sovereign solicitation status for 13 countries in February 2011 has an adverse effect on the ratings of intermediaries operating in these countries. The unsolicited sovereign rating status transmits risk to banks via the rating channel. The results suggest that banks bear a penalty for the solicitation status of their host sovereign’s ratings, thus revealing an unintended and adverse impact of EU regulation.

The seminar takes place from 13:00-14:00 in QUEENS 1.04. Tea will be provided directly afterwards on Floor 0 in the Elizabeth Fry Building.

‘The Affordability of Utilities’ Services in the EU: Extent, Practice and Policy’

CCP’s Autumn Seminar Series continues on Friday 13th November with our very own David Deller (CCP) evaluating ‘The Affordability of Utilities’ Services in the EU: Extent, Practice and Policy‘. The seminar is based on an extensive research project that David has undertaken with Catherine Waddams (CCP) for the Centre on Regulation in Europe (CERRE). The findings of the project are available here, and an abstract for the seminar can be found below.

Abstract

The affordability of utilities (energy, water, telecoms and transport) is a major issue on European policy agendas. This seminar reports the key findings from a recent research project into this topic conducted for the Centre on Regulation in Europe. Key results are highlighted from the most comprehensive mapping of utility affordability in the EU yet compiled and analysis of household-level expenditure data from countries including the UK, France and the Republic of Ireland. Major findings are the stark differences in expenditure shares devoted to utilities between ‘old’ and ‘new’ Member States and the pitfalls of using high-level affordability metrics to evaluate the performance of policies designed to improve utility affordability. The empirical results will be complemented by overviews of different metrics that can be used to evaluate utility affordability and the effectiveness of policies used to tackle fuel poverty.

 

David’s presentation takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.03. 

‘The Damages Directive fails to deliver – Can it be fixed?’

After a short interval for the Annual Conference last week, the CCP seminar series returns on Friday 26th June with the our good friend Sebastian Peyer (University of Leicester) presenting ‘The Damages Directive fails to deliver – Can it be fixed?‘. Seb is a Lecturer in Law at the University of Leicester and an alumnus of CCP and the UEA Law School. He specialises in the area of the private enforcement of competition law and his research interests also encompass empirical legal studies, law and economics and comparative law. An abstract for his seminar can be found below.

Abstract

The EU Damages Directive came into force in December 2014. It seeks to ensure the effective private enforcement of competition law rules by facilitating claims in the courts of the EU Member States. However, the proposed measures do not address pressing issues such as claim aggregation or the funding of claims. Instead, the Directive introduces complex rules regarding access to information and joint and several liability.

This paper investigates the goals and key features of the EU Directive on antitrust damages actions. It demonstrates that the EU framework, if implemented without further changes, is unlikely to encourage more claims and create the envisaged level playing field. The Member States, however, could devise a more balanced system of private actions if they are willing to regulate private antitrust actions beyond the Directive’s remit.

The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.03.

‘What can the European Commission’s Direct Settlement Procedure learn from the US Plea Bargaining System?’

The CCP seminar series continues on Friday 20th May with the magnificent Scott Summers (CCP and LAW) asking ‘What can the European Commission’s Direct Settlement Procedure learn from the US Plea Bargaining System?‘. Scott is a PhD Researcher and Associate Tutor at the UEA Law School. He reads widely in the area of Competition Law with a specialist interest in cartels. His research also extends to Human Rights Law and his PhD thesis considers the extent to which EU cartel enforcement complies with the rights enshrined within the European Convention on Human Rights and the principle of equal treatment. An abstract for his paper can be found below.

Abstract

Since 2008 the Commission has operated a settlement procedure for cases involving cartels. However, the uptake and use of this procedure has been slow; so far there has been a mere seventeen settlements. The EU settlement procedure has a variety of differences to that of the US plea bargaining system. The US system is utilised in more than ninety percent of cases. This paper therefore seeks to ask the question of what the EU settlement procedure can learn from the US plea bargaining system to help improve its utilisation, success and efficiency, whilst ensuring that it complies with Article 6 of the European Convention on Human Rights (ECHR). The paper begins by considering the cases that the Commission has settled so far under the procedure to identify weaknesses and procedural issues within the current approach. Then, the question of whether plea bargaining is compatible with Article 6 of the ECHR is deconstructed and analysed. Once it has been established that it is compatible, a discussion is had about the possibility of implementing such a system within the EU. The paper concludes by identifying ways in which the EU direct settlement procedure’s efficiency and utilisation can be improved whilst ensuring compatibility.

The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.03.

‘Revisiting the Regulatory State: A Multidisciplinary Review Establishing a New Research Agenda’

On Friday 21st November with the dynamic duo of David Deller (CCP) and Francesca Vantaggiato (CCP and PPL) presenting their research entitled ‘Revisiting the Regulatory State: A Multidisciplinary Review Establishing a New Research Agenda‘. David and Francesca first began researching the topic last year when working as Research Associates at the CCP. David joined the Centre in September 2013 having attained a PhD in Economics from the University of Essex. Francesca is a Political Scientist who also joined the CCP in 2013 and has since started her PhD at the School of Politics, Philosophy Language and Communication Studies.  An abstract for their paper can be found below.

Abstract

The paper provides a comprehensive literature review of the ‘Regulatory State’ through the lens of utility regulation. The review is multidisciplinary with it bringing together the insights available from the political science, economics, legal and management science literatures. It is clear that while the term ‘Regulatory State’ is essentially missing from the economics literature a vast array of economics papers provide valuable insights for debates about the Regulatory State within political science.

In addition to reviewing the existing literature, the paper identifies opportunities for future research. The literature is grouped into five topics: (i) Consumers, (ii) Courts, (iii) Ideas, Experts and Expertise, (iv) Governance and (v) Assessing Regulator Performance. Apart from (iv), we believe all of these areas have been under-researched in relative terms. In particular, a key finding is that compared to the information available on Public Utility Commissioners in US States, very little information has been collated on the background, characteristics and careers of individual utility regulators working within Europe.

The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.03.

‘Recent Trends in EC and UK Merger Control and Theories of Harm’

The CCP Seminar Series continues on Friday 14th November with the ever-captivating Bruce Lyons (CCP & ECO) presenting his research on ‘Recent Trends in EC and UK Merger Control and Theories of Harm‘. Bruce is a Professor of Economics at the University of East Anglia and has published extensively on the topic of merger control, including manuscripts on UK merger control and EU merger remedies.  An abstract for his presentation can be found below.

Abstract

This seminar provides an empirical overview of selected areas of competition enforcement by DG Comp and the CMA.  It is in two distinct parts reflecting forthcoming and recent policy presentations given in Brussels and London.  First, I review some trends and recent cases reviewed under the EU merger regulation.  A particular focus is on theories of harm used by DG Comp.  I also consider the efficiency defence in mobile telecoms and financial viability as a determinant of the counterfactual.  Second, I provide a brief overview of the first seven months of the CMA.  In which enforcement areas does the merger of the OFT and CC seem to be doing well and where is its early progress problematic?

The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.03.

‘Exploitative abuses by powerful buyers: analysis of excessively low purchasing prices under Article 102 TFEU’

To kick-off a new academic year at the CCP, we were delighted to welcome Victoria Daskalova (Tilburg Law and Economic Center) on Wednesday 17th September who provided us with a thought-provoking presentation entitled ‘Exploitative abuses by powerful buyers: analysis of excessively low purchasing prices under Article 102 TFEU‘. A copy of her abstract can be found below.

Abstract

Most of the complaints about buyer power in the food sector concern exploitative abuses. Farmers and small producers often claim that they receive unreasonably low purchasing prices, which are insufficient to cover their costs of staying in business. They also complain about the onerousness of the terms imposed on them by powerful purchasers. In these discussions, the application of the EU competition rules often comes into question. However, to what extent the competition rules could actually be applied, is not known due to the lack of enforcement.

The main research question addressed in this paper is: to what extent can exploitative abuses resulting from the exercise of buyer power be addressed under Art. 102 TFEU? What are the challenges and opportunities for plaintiffs, defendants and authorities? For the purposes of the analysis, the research distinguishes between excessive pricing claims and unfair trading terms, and proceeds to discuss excessive pricing claims. It firstly discusses the case law on excessive pricing. Then, it proposes a way in which the test could be adapted to situations involving excessive pricing claims in the context of buyer power. Finally, the paper gives examples of how the test could be applied so that unmeritorious claims are avoided, but scope remains for addressing situations in which buyer power has an undesirable effect.

 

‘The globalization of energy regulation: networks and politics intertwined’

The latest offering in the CCP’s Spring seminar comes courtesy of the hugely gifted Francesca Vantaggiato (CCP) , a Research Associate at the Centre, who will be presenting her research on ‘The globalization of energy regulation: networks and politics intertwined‘ on Friday 7th March. An abstract for her seminar can be found below.

Abstract

The presentation will tackle the topic of regionalism and globalization of energy regulation, as implemented by energy regulators themselves. Regionalism and/or globalization in regulatory matters have been explored in a number of other sectors, namely securities, banking, standard-setting by private bodies, competition. Energy is, among the utilities, the sector in which such developments were to be expected given the geopolitical dimension of energy issues. Currently, there are 11 energy Regional Regulatory Networks in the world, which collectively represent over 200 energy national/state regulatory authorities from all continents. RRNs usually respect a geographical criterion and have both an internal and an external function: internally, they serve to enhance members’ capacity and to socialize members; externally, they serve as means of contact with regulators and other energy stakeholders in other countries. It is hypothesised that energy regulators, in both developed and developing countries, far from being unconcerned with political and power relations, endorse domestic foreign policy objectives with regard to energy issues, and help in carrying them out also through RRNs. The regulators’ motivation to do so could be traced in their willingness to increase their own institutional relevance and legitimacy, both nationally and internationally. By examining the history and the features of these RRNs, the presentation will introduce a set of research questions that aim to investigate the extent and the goals of these regionalization processes. In particular, the role EU and USA regulators have played and play in shaping the features of other RRNs will be presented as evidence of the stated hypothesis.

The seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.1.

‘What Is “Exceptional” About Pharma? An Analysis of Recent EU Competition Policy’

Following on from our special midweek seminar, we are delighted to welcome Margaret Kyle (Toulouse School of Economics) as our guest at the Centre. On Friday 7th February, Margaret will be asking ‘What is “Exceptional” about Pharma? An Analysis of Recent EU Competition Policy‘. An abstract for Margaret’s seminar can be found below.

Abstract

As in most innovative sectors, balancing the incentives created by intellectual property rights with the static costs of market power is a challenge for competition authorities. I examine two areas in the pharmaceutical sector that have received considerable attention in recent years: patent thickets and associated responses, such as “pay for delay” and authorized generics, and reactions to parallel trade. I argue that patent settlements in pharmaceuticals should not be treated exceptionally, as they are very similar to settlements in other innovative industries. Rather than prohibiting all such settlements, antitrust authorities must assess the potential anticompetitive effects of each individual case. In contrast, the pharmaceutical sector does merit exceptional treatment in the case of parallel trade. Unlike other products, drugs face national-level price controls throughout the European Union. Such policies are inconsistent with the existence of a common European market, and parallel trade is an inefficient and inappropriate means of achieving the dubious goal of a common EU price.

The seminar will take place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.1.

‘The EU Directive on collective management and the online single market in music’

The penultimate CCP seminar of the Autumn series takes place on Friday 6th December with John Street (CCP and PSI) and Dave Laing (PSI) presenting their research on ‘The EU Directive on collective management and the online single market in music‘. An abstract for their seminar can be found below.

Abstract

This paper reports on the first phase of a CREATe project on the ‘Regulation of the Collecting Societies’. The Collecting Societies, or Collective Management Organisations (CMOs), are key intermediaries in the distribution of income derived from copyright. Our particular focus is on the music industry. Despite the importance of CMOs to the operation of the industry their role has been neglected. They are, however, now the focus of much attention, largely as a result of the various consequences of digitisation. The Hargreaves Review of copyright called for the tighter regulation of collecting societies, while the EU has pursued a policy of harmonisation of collective rights management to expedite cross-national licenses and the delivery of its single market agenda and its cultural diversity commitments. In this paper, we set out the background to the EU’s intervention and raise a number of questions about the drivers of it and its likely consequences.

As usual, the seminar takes place from 13:00-14:00 in the Thomas Paine Study Centre, Room 1.4.