The Financial Market Crisis and its Consequences for Competition Policy

Any analysis which limits the causes of the financial and economic crisis to either market failure or to the failure of the state can only be viewed as superficial. The causes are rather a combination of both these factors. Had there been a more clearly defined division between the role of the state and that of the private sector in an economy, many problems may never have arisen in the first place. Therefore, one of the main lessons to be learned from the crisis is that the state should actually concentrate on its main task, namely creating the necessary framework conditions for a well functioning market. In order to achieve this the state needs to withdraw to a large extent from any direct economic activities. If the state successfully creates the necessary regulatory framework and manages to ensure both its constancy and that it is adhered to, its own withdrawal from business activities need not per se involve a destabilisation of the markets.