State aid to banks (IVOR nr. 109) 2018/13.11.2:13.11.2 A price leadership ban in disguise?

State aid to banks (IVOR nr. 109) 2018/13.11.2

13.11.2 A price leadership ban in disguise?

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In addition, it is not entirely clear what is understood by “aggressive commercial practices”. This notion is not defined or explained. Only in the decisions on the Spanish banks, the notion of “aggressive commercial practices” is elaborated:

“Banco Mare Nostrum (BMN) shall avoid engaging in aggressive commercial practices throughout the duration of the Restructuring Period. To that end, BMN shall make sure that the nominal interest rate offered to clients on its products must be less attractive than the average of the most competitive rates offered on analogous products by the five main non-aided competitors within the geographical area where BMN operates in the core regions. To this end, BMN will operate in conformity with the restrictions approved by the Board of the FROB on 22 December 2010”.1 [Italics mine, REvL]

This description of the ban on aggressive commercial practices resembles the description of the price leadership ban. This would imply that these two behavioural restrictions are the same. However, this is in sharp contrast with the decisions that include a price leadership ban as well as a ban on aggressive commercial practices.2

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