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It’s “I-told-you-so” time for the bank lobbyists. They predicted that the price controls on the “interchange” debit card fees charged to merchants would automatically lead to higher fees somewhere else – in this case, as fixed monthly fees on debit card holders. This Whac-a-Mole model of pricing may not explain everything … By Robert Hahn, Peter Passell | Tags: bank fees, debit cards, two-sided markets | Category: Financial regulation |
 2 comments“The Federal Reserve Board’s final rule [on debit card swipe fees] is an improvement from its initial proposal,” concluded William Cooper, the CEO of TCF Financial, a small bank (by today’s standard, anyway) in Minnesota. “The Fed’s rule is an irresponsible abdication of its legal duty,” … When the banking industry talks, the U.S. Senate listens. And in the past the bankers have had little difficulty in brushing aside efforts by retailers to regulate fees on charge card transactions. But not this time around: If the House concurs, “interchange” fees on debit card transactions – at least … |
Professor Dieter Helm (Oxford) is a very fine fly fisherman, and an even better economist. If you haven’t done so, take a look at his new book “The Carbon Crunch: How We Are Getting Climate Change Wrong — and How to Fix It” for a bit of unconventional wisdom. He argues that politicians and the general public have not shown any real interest in addressing climate change. Helm argues that places like Europe should focus on setting a price for carbon that would cover consumption (and not just production), and that fracking could be a good “bridge” technology for reducing consumption of coal. The book is readable and insightful for those interested in the inside track on climate policy. 
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