Showing archive for: “Financial Regulation”
The Collected Works of Henry G. Manne
I’m delighted to report that the Liberty Fund has produced a three-volume collection of my dad’s oeuvre. Fred McChesney edits, Jon Macey writes a new biography and Henry Butler, Steve Bainbridge and Jon Macey write introductions. The collection can be ordered here. Here’s the description: As the founder of the Center for Law and Economics ... The Collected Works of Henry G. Manne
"Diminishing the price of law"
The lesson from Jones, see my post below, is that law untamed can be very costly, and with little benefit. This is, of course, not a new idea. In a critical essay of “Southey’s Colloquies on Society,” Lord Thomas Macaulay wrote eloquently about the cost of law and government: “Our rulers will best promote the ... "Diminishing the price of law"
Who decides how much to pay?
What is the proper role for judges in deciding how much investment advisers to mutual funds should be compensated? This is the question the Supreme Court will answer in Jones v. Harris Associates, argued last month. At first, the question seems silly: courts don’t get a say in how much I get paid or how ... Who decides how much to pay?
Another Mis-step in Reactionary Regulation
Today’s Wall Street Journal reports that Senators Cantwell and McCain are preparing legislation to reinstate Glass-Steagall-type restrictions to create a “firewall” between commercial and investment banks. Apparently Rep. Hinchey is preparing a similar assault in the House. The purpose behind the proposal, according to Ms. Cantwell, is so that “banks will stop diverting resources to ... Another Mis-step in Reactionary Regulation
Not Going Anywhere For A While?
Try reading H.R. 4173. All 1300 pages of it. The portion of the bill creating the Consumer Financial Protection Agency starts around page 665 for those keeping score at home.
Symposium Wrap Up
Thanks to all of our participants and readers for the blog symposium–both the posts and the comments were engaging and thoughtful, and I hope these entries will be helpful in the ongoing debate over credit cards and interchange fees. A concluding point or two: Credit card networks are incredibly complex, and no one fully understands ... Symposium Wrap Up
The Institutional Dynamic: Understand First, Act Second—If At All
I have now had a chance to review the excellent posts on the second day, all of which have a common flavor. They expand the universe of relative considerations that need to be taken into account to decide whether imposing caps on interchange fees enhances or reduces overall social welfare. The narrow perspective on this ... The Institutional Dynamic: Understand First, Act Second—If At All
Merchant Collusion as an Antitrust Remedy
In my first post I discussed the potential for interchange legislation from a consumer protection perspective, that is, would the combination of disclosure requirements coupled with a reduction of interchange fees be likely to improve consumer welfare. I concluded that from the consumer protection perspective, the case for interchange legislation was weak. I noted that ... Merchant Collusion as an Antitrust Remedy
Competitive Payments
Most of the discussion related to pricing at the point of sale has emphasized the “cross-subsidy” between those that pay with cash and checks and those that pay with credit cards. This discussion misses the core of the problem in a market where the use of cash and checks is rapidly declining; the central problem ... Competitive Payments
The Fee Neutrality Claim
Will reduction in interchange fees help or hurt consumers? Two posts yesterday made the conjecture that a reduction in one category of fees would only increase other fees, and that the overall sum of fees will not change. This is the fee-neutrality claim. Todd Zywicki writes: The mathematics of the situation is inescapable: card issuers ... The Fee Neutrality Claim
Allocating the Costs of Fraud
Geoffrey A. Manne is Executive Director of the International Center for Law & Economics and a Lecturer in Law at Lewis & Clark Law School. I take to heart Jim’s claim that fraud is too-little discussed in this realm given its cost, and thus I’ll try my hand at it. Every discussion of the industrial ... Allocating the Costs of Fraud
Assessing the Social Effects of the Use of Credit Cards
The GAO has a fairly extensive discussion of the costs and benefits of credit cards to merchants. However, that discussion focuses on the individual benefits. I would like to step back and put two of those benefits – increased merchant sales and fraud prevention costs – into the larger context that I discussed earlier. First, ... Assessing the Social Effects of the Use of Credit Cards
