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Showing 9 of 524 Publications in Financial Regulation & Corporate Governance
TL;DR Sen. Richard Durbin’s (D-Ill.) amendment to 2010’s Dodd-Frank Act capped interchange fees on debit cards issued by large banks and required all debit-card issuers to permit routing of payments over multiple networks.
Sen. Richard Durbin’s (D-Ill.) amendment to 2010’s Dodd-Frank Act capped interchange fees on debit cards issued by large banks and required all debit-card issuers to permit routing of payments over multiple networks. Now, he and co-sponsor Roger Marshall (R-Kan.) have introduced the Credit Card Competition Act, which would impose similar routing requirements on credit cards. With the bill having few prospects to move forward on its own, Durbin and Marshall hope to attach it as an amendment to the National Defense Authorization Act.
As with the original Durbin Amendment, the mandate would benefit some competitors but won’t increase competition. Instead, by rigging markets, it will lead to higher costs, less security, and less innovation. Ultimately, consumers will be the losers.
Read the full explainer here
Popular Media The Securities and Exchange Commission said this week that it has settled charges against Kim Kardashian for promoting a crypto investment on her Instagram page. In June . . .
The Securities and Exchange Commission said this week that it has settled charges against Kim Kardashian for promoting a crypto investment on her Instagram page. In June 2021, Ms. Kardashian touted EthereumMax’s token, EMAX, to her 331 million followers, without disclosing she was paid $250,000 for the post.
Read the full piece here.
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 . . .
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 does everything a credit card can do, but better.
Popular Media California has a wildfire crisis. Arguably, the entire Western United States has a wildfire crisis, but California’s crisis is of an entirely different magnitude. Read . . .
California has a wildfire crisis. Arguably, the entire Western United States has a wildfire crisis, but California’s crisis is of an entirely different magnitude.
Scholarship Abstract The appropriate boundary between public and private regulation has long been of interest to law and economics scholars. Especially relevant for understanding the private . . .
The appropriate boundary between public and private regulation has long been of interest to law and economics scholars. Especially relevant for understanding the private regulatory dynamics of the digital currency industry are the ways in which self-regulation has existed in financial markets. These studies suggest that too much market concentration and too much competition both diminish the possibility for self-regulation in the interest of consumers. Similarly, certain exchange roles give rise to permission of market manipulation by sub-classes of actors in a way that make exchange self-regulation less likely. Nonetheless, the unique technical features of blockchain networks, and the way in which consumers and industry participants uniquely value transparency and immutability means the possibility for productive self-regulation to benefit retail consumers may be greater than skeptics make it out to be. Furthermore, industry self-regulation can preempt or substitute for more distortionary or ill-fitting regulation emanating from public authorities. Finally, given the inevitability of public regulation, this suggests that developing digital currency industry complementarities along the lines of those studied in banking and commodities and securities exchanges is likely to shed light on the emergent dynamics of industry self-regulation most likely to benefit consumers.
Scholarship Abstract Waiver contracts are agreements in which one party promises not to sue the other for injuries that occur during their contractual relationship. Waivers are . . .
Waiver contracts are agreements in which one party promises not to sue the other for injuries that occur during their contractual relationship. Waivers are controversial in the consumer context, especially when presented in standard form, take-it-or-leave-it contracts. The law on waivers appears muddled, with no consistent doctrine or policy among the courts on enforceability. The aim of this paper is to offer a consistent set of policies that can form the foundation of a consistent set of doctrines, leading ultimately to a more apparently consistent treatment of waivers in the courts. The most basic piece of this paper’s framework is a contract theoretic analysis of the wealth (or welfare) created by a contractual provision. In this framework, waivers should be enforceable when they are likely to increase the welfare of the contracting parties, and otherwise not enforceable. Waivers are likely to increase the welfare of the parties when litigation is likely to reduce their welfare. Litigation is wealth reducing when the social value of the deterrence created through litigation is low relative to the costs of litigation. The social value of deterrence is low, in turn, when the productivity of precaution, in terms of accident avoidance, is low – in other words, additional precaution has little or no “bang for the buck”. These general propositions send me on a search for the factual conditions associated with low productivity precaution. The most important ones are inherency of risk and the existence of multiple causal factors. I find the cases are consistent with this precautionary productivity thesis. The immediate implication is that waivers generally are not enforceable or unenforceable according to their language. Waivers are enforceable contextually, conditional on facts indicating inherency of risk or weak causation.
Scholarship Abstract We assess the capacity of the U.S. property-liability insurance industry and the efficiency of the state guaranty fund system in response to large scale . . .
We assess the capacity of the U.S. property-liability insurance industry and the efficiency of the state guaranty fund system in response to large scale loss events to assess the resilience of the current system to the growing challenges of climate change. We identify characteristics of the industry’s capital structure and the guaranty fund system that limit the ability to indemnify policyholders following extreme catastrophic losses. We also consider the sustainability of the system over time under assumptions of increasing loss frequency and severity. We find that some attributes of insurance guarantees present short-term problems for policyholders and create long-term challenges for competitive private insurance markets, particularly when a subset of insurers shoulders the burden for past losses.
Popular Media Among collectors, it is said that art is cheap; it is assurances that are expensive. What gets people to spend thousands on some dribbles on . . .
Among collectors, it is said that art is cheap; it is assurances that are expensive. What gets people to spend thousands on some dribbles on a canvas by a no-name is the promise — by a gallery owner or other “expert” — that the thousands will become millions.
The value of money is the same.
Popular Media Turf battles are nothing new in Washington, but the one currently raging over which federal agency has authority to regulate the trading of digital assets . . .
Turf battles are nothing new in Washington, but the one currently raging over which federal agency has authority to regulate the trading of digital assets reveals deep dysfunction in the modern administrative state. The battle goes far beyond which agency gets more power; the future of the internet may be at stake.
