Securities Activities of Banks in the GLB Era - Cleary Gottlieb Steen ...

ank can show that a customer has one
or more bona fide alternative sources of
the desired product or that one or more
other financial institutions are bidding
on a bona fide basis to provide the
desired product to such customer on
similar terms, then no coercion or force
would be involved unless there is some
demonstrable reason why the customer
is being prevented from choosing
among the alternative sources.
(vi) Proof that no coercion is involved may
be shown by the nature of the customer
relationship as well as by the
competitive landscape. For example, a
bank may present a tying arrangement
to a customer that has a well-trained
staff (e.g., a customer that has a sizable
treasury operation) who are capable of
negotiating favorable terms for a
desired product on a stand-alone basis
or tied to other products or services.
(iii) The 2004 Bank Submission included an extensive
analysis of the competitiveness of various credit
markets in order to provide additional support for the
adoption of the Proposed Large Customer Safe-Harbor
Exemption.
(A) According to the Submission, the analysis
demonstrates that credit facilities involving
“large customers” are inherently competitive,
and therefore, that such customers cannot be
coerced by any bank. In addition, the
Submission reached the conclusion that the
syndicated loan market is an intensely
competitive market in which no bank can
coerce customers into accepting unwanted
products and services.
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