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Working Paper
THE IMPACTS OF FINANCIAL REGULATIONS: SOLVENCY AND LIQUIDITY IN THE POST-CRISIS PERIOD
This paper discusses the new financial regulations in the post?financial crisis period, focusing on capital and liquidity regulations. Basel III and the capital stress tests introduced new requirements and new definitions while retaining the structure of the pre-2010 requirements. The total number of requirements increased, making it difficult to determine which constraints are binding. We find that the new common equity tier 1 (CET1) and Level 1 high-quality liquid assets (HQLAs) are the binding constraints at large U.S. banks, especially for banks that are active in capital markets ...
Journal Article
Debit Card Interchange Fees Charged to Small Merchants After Regulation II
During the 2000s, both debit card transactions and interchange fees charged to merchants increased sharply in the United States, in part due to routing limitations and exclusivity agreements between card networks and issuers. To address growing fees and limited routing options, the Board of Governors of the Federal Reserve System implemented Regulation II in 2011. Regulation II capped debit card interchange fees received by large issuers (but not smaller “exempt” issuers), prohibited network exclusivity arrangements, and prohibited limitations on merchants’ routing choices.In this ...