During several episodes of declining or rising interest rate changes in the 1980s and 1990s, credit card rates changed little. At the same time, credit cards consistently earned higher returns than most other bank products. Ausenbel (1991) argues the reason is that the industry deviates from a...

The future is not only out there, it is also what we make of it. This paper presents a range of predictions about securities exchanges. It seeks both to extrapolate logical conclusions from current trends, and to provide a virtual bully pulpit to ensure that all is for the best in the best of...

It is a widespread practice among mutual fund managers to voluntarily waive fees they have a contractual right to claim. The effective fee charged may be substantially less than indicated in expense ratios and may vary over the year despite a constant contractual fee. Retail fund managers use...

This paper shows that banks may have an incentive to reduce screening when the proportion of untested borrowers on the market increases, leading to a deterioration of their portfolios and a contraction of their profits. The paper addresses the issue in the context of a simple model where banks...

The recent waves of large mergers and acquisitions in both manufacturing and service industries in the United States raise important questions concerning the public policy tradeoffs between possible gains in operating efficiency versus possible social efficiency losses from a greater exercise of...

What is a Financial System?<p> <p>The purpose of a financial system is to channel funds from agents with surpluses to agents with deficits. In the traditional literature there have been two approaches to analyzing this process. The first is to consider how agents interact through financial markets....</p></p>

Analysts have raised serious questions about current workers' ability and inclination to save enough for retirement. This is of obvious policy interest given the need to reform national retirement income programs. In the present paper we examine recent research developments regarding retirement...

Public sector pension plans are managed in diverse ways, with governance policies distinguished according to their board composition and size, how the trustees structure their investment decisions, what restrictions are placed on their investments, and whether they have independent performance...

In 1975, Congress directed the SEC to develop a national market system in which all orders to buy or sell equities would interact. A national market system abhors fragmentation and assumes that one market will best serve the needs of all investors. Such an assumption does not capture the...