Showing archive for: “Banking & Insurance”
Why Corner Post’s Merchant Victory May Not Ring Up Savings
Merchants persuaded a federal appeals court to throw out the Federal Reserve’s debit-card fee cap. They might want to hold the applause until they see its replacement. A ruling aimed at the Fed’s arithmetic could leave room for a higher cap—and a fuller accounting of what consumers get for those fees. In Corner Post, Inc. ... Why Corner Post’s Merchant Victory May Not Ring Up Savings
Old Insurance Wisdom for New AI Risks
Artificial intelligence (AI) may be new to the insurance market, but uncertainty is an old customer. Insurers have spent centuries figuring out how to price unfamiliar risks, reward precautions, and avoid betting the whole portfolio on the same weak link. AI gives them new facts to assess, not a reason to discard that experience. In ... Old Insurance Wisdom for New AI Risks
New Financial Regulatory Reforms Could Spur the Economy
Strong and vibrant financial markets are key to a thriving American economy. Rising regulatory costs, however, pose a burgeoning threat to financial-market efficiency. Recent executive-agency initiatives to harmonize federal government oversight of U.S. financial markets and to reform existing regulatory programs are notable. A new push to eliminate anticompetitive federal financial rules could yield further ... New Financial Regulatory Reforms Could Spur the Economy
What the IMF Gets Wrong About Costa Rica’s Payment-Card Caps
The Asamblea Legislativa de la República de Costa Rica (Costa Rica’s legislature) moved in 2020 to empower the Banco Central de Costa Rica (BCCR), the nation’s central bank, to impose price controls on fees charged by both payment-card issuers and acquirers. I have written previously about the perverse effects these price controls can generate (here, ... What the IMF Gets Wrong About Costa Rica’s Payment-Card Caps
The Law & Economics of the Capital One-Discover Merger
Capital One Financial announced plans late last month to acquire Discover Financial Services in a $35.3 billion deal that would give Capital One its own credit-card payment network, while simultaneously allowing the company to expand its deposit base, credit-card offerings, and rewards programs. Conversely, credit analysts like Matt Schulz of LendingTree note that “if Capital ... The Law & Economics of the Capital One-Discover Merger
The CFPB’s Misleading Slant on Competition in Credit-Card Markets
In yet another example of interagency cheerleading from the Federal Trade Commission (FTC), Chair Lina Khan recently touted the work of the Consumer Financial Protection Bureau (CFPB) on payments networks: New @CFPB research reveals that large banks are offering worse credit card terms & interest rates than small banks and credit unions, regardless of credit ... The CFPB’s Misleading Slant on Competition in Credit-Card Markets
Does ‘Open Finance’ Promote Competition or Facilitate Free Riding?
Financial technology, or so-called “fintech,” is disrupting the financial sector, and that’s a good thing. Fintech services are making finance more digital and more user-friendly. This, in turn, has led to reduced transactions costs and increased levels of competition, innovation, and financial inclusion. Alas, the emergence of fintech has also been accompanied by a rising ... Does ‘Open Finance’ Promote Competition or Facilitate Free Riding?
Is Pix Really the End of Credit Cards?
In late August, Roberto Campos Neto, the head of Brazil’s central bank, is reported to have said about Pix, the bank’s two-year-old real-time-payments (RTP) system, that it “eliminates the need to have a credit card. I think that credit cards will cease to exist at some point soon.” Wow! Sounds amazing. A new system that ... Is Pix Really the End of Credit Cards?
Fleites v. MindGeek Contemplates Significant Expansion of Collateral Liability
In Fleites v. MindGeek—currently before the U.S. District Court for the District of Central California, Southern Division—plaintiffs seek to hold MindGeek subsidiary PornHub liable for alleged instances of human trafficking under the Racketeer Influenced and Corrupt Organizations (RICO) and the Trafficking Victims Protection Reauthorization Act (TVPRA). Writing for the International Center for Law & Economics ... Fleites v. MindGeek Contemplates Significant Expansion of Collateral Liability
Cassandra, the Fear of Overregulation, and the CFPB
In the Huffington Post, Marcus Baram warns against those who claim to be concerned about over-regulation on Wall Street and in the consumer protection sphere. Baram writes: Today, Wall Street is again on the attack against a regulatory overhaul that includes more stringent investor and consumer protections. Though the financial landscape is far different and ... Cassandra, the Fear of Overregulation, and the CFPB
Unconscious Parallelism or Collusion? Libor Edition
News comes that the DOJ and SEC are “examining whether some of the world’s biggest banks colluded to manipulate a key interest rate before and during the financial crisis, affecting trillions of dollars in loans and derivatives, say people familiar with the situation.” The Wall Street Journal Reports that: The inquiry, led by the U.S. ... Unconscious Parallelism or Collusion? Libor Edition
Comment to the Federal Reserve Board on Regulation II: Where’s the Competitive Impact Analysis?
I have submitted a comment to the Federal Reserve Board concerning Regulation II, along with the American Enterprise Institute’s Alex Brill, Christopher DeMuth, Alex J. Pollock, and Peter Wallison, as well as my George Mason colleague Todd Zywicki. Regulation II implements the interchange fee provisions of the Dodd-Frank Act. The comment makes a rather straightforward ... Comment to the Federal Reserve Board on Regulation II: Where’s the Competitive Impact Analysis?
