#MasterCard – Federal Financial Analytics

30 05, 2023

Daily053023

Eliza Allen2023-05-30T17:13:13-04:00May 30th, 2023|2- Daily Briefing|

Fed Study Validates Bank/Shadow-Bank Interconnections, Systemic Risk

A new study by staff from the Federal Reserve Banks of Boston and New York evaluates the banking-sector impact of fire sales across multiple NBFI segments, finding numerous bank vulnerabilities to nonbanks not only through direct exposures, but also through complex, indirect channels.

McHenry Protests U.S. Outbound-Investment Constraints

HFSC Chairman McHenry (R-NC) sent a letter to Secretary Yellen late Friday demanding information about a potential executive order that would enable CFIUS to prohibit or require notification of outbound investments into China, stating that the Administration’s interest in capital controls necessitates Congressional oversight.

IMF Article Calls SVB Resolution “Riskless Capitalism”

An article in the IMF’s forthcoming Finance and Development magazine issue argues that SVB’s uninsured depositors enjoyed “riskless capitalism,” concluding that high moral hazard-risks will persist without incentives for depositor due diligence.

FTC Demands Greater Debit-Card Data Access

The FTC today finalized a consent order requiring Mastercard to provide competing card networks with the customer account information necessary to process debit payments, alleging that the company illegally withheld that information to prevent merchants from using its competitors or Mastercard-branded debit cards saved in e-wallets outside of traditional networks.

Daily053023.pdf…

DAILY122322

Eliza Allen2022-12-23T12:16:11-05:00December 23rd, 2022|2- Daily Briefing|

FTC Tackles Debit-Card Networks, Access

With no let-up for the holidays, the FTC today charged that MasterCard violated both the Durbin Amendment and FRB rules (see FSM Report INTERCHANGE11) mandating that merchants be given the choice of competing debit-card networks and that no efforts be made to block them from doing so. The order applies to the competing ecommerce network by virtue of Mastercard’s tokenizing practices, which the FTC concluded impeded merchant access in numerous improper ways. The consent order requires MasterCard to give competing networks the customer information necessary to process the debit-card transaction and bans Mastercard from barring use of other tokens.

Daily122322.pdf…

INTERCHANGE10

William Cross2023-01-04T12:45:54-05:00August 11th, 2022|1- Financial Services Management|

Credit-Card Networks

Two senators have reopened questions about the manner in which card-related payments are handled, tackling those applicable to credit cards with a bill mandating that merchants must be given a network choice that is not either Visa or Mastercard in order to, the sponsors argue, increase competition and lower credit-card transaction costs. Although the multi-network requirement would apply only to banks with assets over $100 billion, it would likely have the effect of lowering swipe fees across the sector because exempt banks would be compelled by market forces to find lower-cost networks. The extent to which these lower-cost networks are also sound and resilient under stress is uncertain as no safety-and-soundness or operational requirements directly apply to card-processing networks.

INTERCHANGE10.pdf…