Much work has been done in recent years on the subject of insurance regulation and capital requirements, and the process of regulatory reform will continue. It behooves insurance supervisors to take a step back, revisit the underlying assumptions that have driven supervisory reform in the...

The Optional Federal Chartering (OFC) proposal introduced in the last session of Congress may have been the right bill for the introduction of federal regulation of the insurance industry at the turn of the 20th century. However, the current OFC proposal shows its 19th century roots as it merely...

The application of U.S. antitrust policy toward mergers in the banking industry is based on past research suggesting that there is a trade-off between adverse effects on consumer welfare owing to potentially augmented market power and possible welfare-improving effects arising from efficiency...

This policy brief reviews recent studies that have sought to apply analysis of network externalities and the theory of two-sided markets to card payment networks, and it evaluates the public policy implications of this body of work. Three general conclusions emerge from the bulk of the research...

This policy brief evaluates the banking and policy implications of 2006 Congressional legislation authorizing the Federal Reserve to pay interest on reserves held at Federal Reserve banks beginning in October 2011. This upcoming policy change has received remarkably little attention from the...

Despite the considerable media attention given to the collapse of the market for complex structured assets that contain subprime mortgages, there has been too little discussion of why this crisis occurred. The Subprime Crisis: Cause, Effect and Consequences argues that three basic issues are at...

In the recent debate over the appropriate governmental level at which to regulate insurance markets, opponents of a new federal role often raise concerns about the adequacy of consumer protection if regulation is removed from the states. This paper analyzes the need for market conduct regulation...

S. 40, the National Insurance Act of 2007, requires the development of a system of Prompt Corrective Action (PCA) for federally chartered insurers. This paper discusses the issues associated with developing a system of PCA and makes recommendations regarding its structure. First, the paper...

The increasing risks that subprime lenders have been willing to take have culminated in a debacle of rising foreclosures. So far, however, subprime defaults and foreclosures are lower than they were about five years ago, and the problem is likely to be confined to the subprime market, rather...

China has a two-part financial system with a competitive market-based component and a public, government directed component. Both have reformed rapidly since China's reforms began in 1978. The market-based component is immature and subject to numerous systemic weaknesses, while the government...