New Economics Papers
on Law and Economics
Issue of 2013‒01‒07
three papers chosen by
Jeong-Joon Lee, Towson University

  1. Power Markets Shaped by Antitrust By Sadowska, M.; Willems, Bert
  2. Patent Laws and Innovation: Evidence from Economic History By Petra Moser
  3. Why the transfer of bank supervisory powers back to the Bank of England is a step in the right direction: Revisiting the role of external auditors in bank and financial services supervision By Ojo, Marianne

  1. By: Sadowska, M.; Willems, Bert (Tilburg University, Tilburg Law and Economics Center)
    Abstract: Abstract: In November 2011 Sweden abolished the uniform national electricity price and introduced separate price zones. This was the result of an antitrust settlement between the Commission and the Swedish network operator, which was accused of discriminating between domestic and export electricity transmission services and segmenting the internal market. Based on this case, we show how the Commission uses competition law enforcement to foster market integration in the energy sector. We find that, even though the Commission’s action under competition rules was contrived and lacked economic depth, the commitment package provides an economically sound, longterm solution to network access and congestion management in Sweden. Such a quick and far-reaching change of Swedish congestion management could not have been achieved by Swedish policymakers or enforcement of the EU sector-specific regulation.
    Keywords: competition policy;Article 102 TFEU;commitment decisions;European energy markets;transmission congestion;Swedish network operator.
    JEL: K21 K23 K K42 L43 L44 L94
    Date: 2012
  2. By: Petra Moser
    Abstract: What is the optimal system of intellectual property rights to encourage innovation? Empirical evidence from economic history can help to inform important policy questions that have been difficult to answer with modern data: 1) Does the existence of strong patent laws encourage innovation? And 2) May patent laws influence the direction – as opposed to the rate – of technical change? Economic history can also help to shed light on the effectiveness of policy tools that are intended to address problems with the current patent system: 3) How do patent pools, as a mechanism to mitigate litigation risks, influence the creation of new technologies? 4) Will compulsory licensing, as a mechanism to improve access to essential innovations in developing countries, discourage innovation in the developing countries? This essay summarizes results of existing research and highlights promising areas for future research.
    JEL: K0 L24 L4 N0 O3 O31 O33 O34 Q16 Q55
    Date: 2012–12
  3. By: Ojo, Marianne
    Abstract: The need for effective supervision of capital markets is becoming all the more evident in the aftermath of the recent LIBOR and rate rigging scandals. Financial regulators or indeed bank regulators cannot perform such a function effectively without the involvement of auditors in the supervisory process. A challenging task awaits the incoming Bank of England Governor, Mark Carney – particularly given the reduced involvement of auditors in the bank supervisory process since the time of assumption of the Financial Services Authority's bank supervisory functions. However, he (as well as other recent financial reforms) may prove to be the much needed boost required in the bank and indeed, financial supervisory process. This paper is aimed at highlighting why the transfer of bank supervision back to the Bank of England is required if further progress is to be made in the effective regulation and supervision of the financial services sector. It also highlights shortcomings which exist and need to be addressed if the Bank of England is to perform its tasks efficiently as well as regain the momentum and advantages it had acquired before its supervisory powers were transferred to the Financial Services Authority.
    Keywords: monetary policy; supervision; Bank of England; FSA; external auditors; regulation; financial stability; Financial Crisis; Basel Core Principles; audits; capital markets; central banks
    JEL: K2 E0 E5 M4 E3 G01
    Date: 2012–12–23

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