Abstract
We test the overarching hypothesis that financial institutions face relatively milder fines due to financial stability concerns. To do so, we use an event study approach on a sample of 441 listed cartel members prosecuted by the European Commission between 1998 and June 2020. Our results suggest that banks face a positive effect on their market value upon the dawn-raid and the announcement of the cartel fine, whereas both events negatively (and significantly) affect non-banks. Using a novel measure of “harm”, we show that this positive effect is not driven by the resolution of uncertainty, but is rather a consequence of “too big to fine” concerns.