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TOTM Looking for something to blame for the Greek debt crisis, some observers are pointing their fingers at credit derivatives. An article in yesterday’s New York . . .
Looking for something to blame for the Greek debt crisis, some observers are pointing their fingers at credit derivatives. An article in yesterday’s New York Times makes the case that credit default swaps (CDS), and specifically their sale by Goldman Sachs, are somewhat to blame in part for Greece’s problems.
Read the full piece here.
TOTM Professor Bainbridge has a provocative post up taking on empirical legal scholarship generally. The While the Professor throws a little bit of a nod toward . . .
Professor Bainbridge has a provocative post up taking on empirical legal scholarship generally. The While the Professor throws a little bit of a nod toward quantitative work, suggesting it might at least provide some “relevant gist for the analytical mill,” he concludes that “it’s always going to be suspect — and incomplete — in my book.” Here’s a taste…
TOTM Usha Rodrigues and Mike Stegemoller have penned an interesting article, “Placebo Ethics,” assessing the effect of one of SOX’s disclosure provisions: The required immediate disclosure . . .
Usha Rodrigues and Mike Stegemoller have penned an interesting article, “Placebo Ethics,” assessing the effect of one of SOX’s disclosure provisions: The required immediate disclosure of waivers from a company’s code of ethics, found in Section 406 of the law. The article is concrete, informative, empirical and well-written.
TOTM I’m sure it’s an honor just to be nominated. A recent opinion from Judge Posner cites our very own Josh Wright (Joshua D. Wright & . . .
I’m sure it’s an honor just to be nominated.
A recent opinion from Judge Posner cites our very own Josh Wright (Joshua D. Wright & Todd J. Zywicki, “Three Problematic Truths About the Consumer Financial Protection Agency Act of 2009,” Lombard Street, Sept. 14, 2009, available here) (by the way, the essay has drawn a few comments, my favorite of which is definitely the one titled, “are you stupid or scumbags[?]”).
TOTM Today the SEC voted 3-2 to approve an interpretive release offering guidance to companies on disclosure obligations as they relate to climate change. Commissioners Casey . . .
Today the SEC voted 3-2 to approve an interpretive release offering guidance to companies on disclosure obligations as they relate to climate change. Commissioners Casey and Paredes voted to reject the proposed guidance.
TOTM 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 . . .
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.
For the uninitiated, the interchange fee is the fee charged (usually) by the credit card issuing bank (the cardholder’s bank) to the credit card acquiring . . .
For the uninitiated, the interchange fee is the fee charged (usually) by the credit card issuing bank (the cardholder’s bank) to the credit card acquiring bank (the merchant’s bank) to settle a credit card transaction between the cardholder and the merchant. Interchange fees, as well as various rules set by credit card networks governing credit card transactions and the structure of the industry more generally have long been the subject of debate, litigation and regulation. Credit cards have been among the most successful financial innovations ever, and credit card markets are fascinatingly complex–two features leading inexorably not only to commercial disputes but also to academic dispute and scholarly attention.
As regular readers may recall, we have had a few posts on the topic, including a spirited exchange when Steve Salop was visiting a few weeks ago. I noted at the time that the topic of the regulation of interchange was interesting and timely–in fact, since then, while the then-pending bills are still pending in Congress, the GAO has issued its report on the effects of interchange fees on consumers and merchants. The GAO report notes that interchange fees have been increasing, but questions whether this leads to any viable policy responses. As the GAO notes:
Proposals for reducing interchange fees in the United States or other countries have included (1) setting or limiting interchange fees, (2) requiring their disclosure to consumers, (3) prohibiting card networks from imposing rules on merchants that limit their ability to steer customers away from higher-cost cards, and (4) granting antitrust waivers to allow merchants and issuers to voluntarily negotiate rates. If these measures were adopted here, merchants would benefit from lower interchange fees. Consumers would also benefit if merchants reduced prices for goods and services, but identifying such savings would be difficult. Consumers also might face higher card use costs if issuers raised other fees or interest rates to compensate for lost interchange fee income. Each of these options also presents challenges for implementation, such as determining at which rate to set, providing more information to consumers, or addressing the interests of both large and small issuers and merchants in bargaining efforts.
Our symposium will bring together several of the world’s leading experts on interchange fees and the law and economics of credit card markets. Our participants will discuss a range of issues surrounding the regulation of interchange and credit card markets.
The symposium will take place on Tuesday and Wednesday, December 8 and 9.
We look forward to an engaged discussion in the comments to the symposium posts, and we hope all of our readers will check in frequently during the symposium and will contribute to the debate.
We’ll announce the agenda and schedule no later than Monday, December 7.
Posted in announcements, business, credit cards, disclosure regulation, economics, financial regulation, interchange and credit cards symposium, law and economics, markets, politics
TOTM I will focus my blog post on one of the proposals for reducing interchange fees: the requirement that the fees be disclosed to consumers. I . . .
I will focus my blog post on one of the proposals for reducing interchange fees: the requirement that the fees be disclosed to consumers. I am not sure how seriously this option is taken by the GAO report. Indeed, the report concedes that mandated disclosures in this context are not very likely to be effective, because “consumers are likely to disregard this kind of information.” But I will not be surprised if, of all the regulatory options discussed in the report, in the end it will be the disclosure rule that is enacted.
TOTM So, AMD and Intel settled. Its a case we’ve covered here in significant detail. Terms haven’t been announced publicly. AAI has predictably argued that the . . .
So, AMD and Intel settled. Its a case we’ve covered here in significant detail. Terms haven’t been announced publicly. AAI has predictably argued that the settlement shouldn’t preclude further enforcement action from NY and the FTC. The NY Times suggests the same. They may be right, although Herb Hovenkamp, among others, has suggested that the settlement “has taken a lot of the wind out of the sails” of the FTC case.
