6 11, 2023

Karen Petrou: How Regulators Unwittingly Run Roughshod Over the Public Good

2023-11-06T15:47:01-05:00November 6th, 2023|The Vault|

Friday’s American Banker included a Kyle Campbell article quoting me reiterating some points in my recent testimony about the need for cumulative-impact analyses of the raft of pending rules.  This led others to suggest ulterior motives, arguing that calls for cumulative-impact analyses are fig-leaves dangling over efforts to gut the rules.  While advocates do not often argue for analytical purity when obscurity suits them, the absence of analytical rigor is nonetheless an abrogation of the public good by public officials.  Setting rules based on airy assertions that it will all come right in the end since there most likely won’t be financial crises or at least new financial crises like the old financial crises ensures that this regulatory round will have at least as much wreckage as those that came before.

The public good when it comes to financial policy is best measured by careful consideration of something wholly absent in all of the agencies’ thinking:  economic equality.  In its absence, the nation will suffer from still-worse political acrimony, an even worse public-health crisis, growing populations of Americans without fundamental financial security, and even higher odds for still more devastating financial crises.  How do I know this?  Look at American financial policy since at least 2000 and see what happened.

The Fed is particularly high-handed when it comes to public-good rationales not just for its rules, but also for its still more vital monetary-policy responsibilities.  The Fed cloaks itself with the “dual” mandate of “maximum employment” and “price stability” even …

4 05, 2022

FedFin on: Swipe-Fee Disclosures, Antitrust Pressure Likely Following Senate Hearing

2023-03-01T14:41:37-05:00May 4th, 2022|The Vault|

As anticipated, bankers and card networks squared off with merchants at today’s Senate Judiciary hearing addressing credit-card interchange fees.  Chairman Durbin (D-IL) strongly defended his amendment restricting debit-card fees, arguing that expanding fee constraints and network-competition provisions to credit cards would reduce inflation and increase consumer spending power…

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