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A risk governance approach to managing antitrust risks in the banking industry

Author

Listed:
  • Denise Scheld

    () (University of Giessen)

  • Johannes Paha

    () (University of Giessen)

  • Nicolas Fandrey

    () (Protiviti GmbH)

Abstract

Competition law compliance has become increasingly important in the banking industry as the number of infringements and the associated fines imposed by the European Commission are rising. This article shows that not only governments and regulators, but also shareholders and managers, should be interested in managing antitrust risks in banks in order to avoid competition law infringements. Therefore, this article sets out an approach to assessing the residual risk of antitrust non-compliance as well as the costs associated with such conduct, in order to be able to identify the required intensity of risk management activities. It also shows how antitrust risk management can be implemented in banks’ governance structures using the Three Lines of Defence model and the COSO ERM framework. As a result, it demonstrates how to integrate antitrust risk management activities into existing structures and processes, thus improving the efficiency and effectiveness of overall risk management, in particular antitrust risk management.

Suggested Citation

  • Denise Scheld & Johannes Paha & Nicolas Fandrey, 2015. "A risk governance approach to managing antitrust risks in the banking industry," MAGKS Papers on Economics 201535, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  • Handle: RePEc:mar:magkse:201535
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    File URL: http://www.uni-marburg.de/fb02/makro/forschung/magkspapers/paper_2015/35-2015_scheld.pdf
    File Function: First 201535
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    More about this item

    Keywords

    risk management; antitrust; compliance; banks; competition;

    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law

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