Industry committee  Is this a cap on interest rates you're talking about?

Industry committee  It's usury laws. A long, long time ago, I wrote a paper, which never got published, on usury regulation. There's a huge amount of government regulation on interest rates, and it goes back to the Bible prohibiting any interest rates; it's in Deuteronomy, if you want to know where

Industry committee  But if you look at the history of this, banks never got involved very much in consumer lending. Consumers used to borrow from sales finance contracts at very, very high interest rates. Credit cards were a way, even though we think of them as high-cost--but you have to look at the

Industry committee  Yes. That's another interesting example.

Finance committee  Is this a cap on interest rates you're talking about?

Finance committee  It's usury laws. A long, long time ago, I wrote a paper, which never got published, on usury regulation. There's a huge amount of government regulation on interest rates, and it goes back to the Bible prohibiting any interest rates; it's in Deuteronomy, if you want to know where

Finance committee  But if you look at the history of this, banks never got involved very much in consumer lending. Consumers used to borrow from sales finance contracts at very, very high interest rates. Credit cards were a way, even though we think of them as high-cost--but you have to look at the

Finance committee  Yes. That's another interesting example.

Industry committee  I have two points. One is that the interchange fee should not be related to costs. The second thing is economists do studies, empirical work, and we look to see what happens. We know we have a system. If your argument were correct and cash were cheaper and it was more expensive t

Industry committee  Let me take one part of your question. You asked is there a study that shows that credit card use has increased as consumption has increased. There is a study, and that study was quoted in the Visa presentation. It's the Global Insight and Visa Canada study—The Benefits of Electr

Finance committee  I have two points. One is that the interchange fee should not be related to costs. The second thing is economists do studies, empirical work, and we look to see what happens. We know we have a system. If your argument were correct and cash were cheaper and it was more expensive t

Finance committee  Let me take one part of your question. You asked is there a study that shows that credit card use has increased as consumption has increased. There is a study, and that study was quoted in the Visa presentation. It's the Global Insight and Visa Canada study—The Benefits of Electr

Finance committee  Given that full disclosure is an issue, I should disclose that I did my Ph.D. under Milton Friedman at the University of Chicago, and I'm a firm believer in the principle of operation of markets. The market is working, and if you take a look at the Canadian banking system, it's

Industry committee  Given that full disclosure is an issue, I should disclose that I did my Ph.D. under Milton Friedman at the University of Chicago, and I'm a firm believer in the principle of operation of markets. The market is working, and if you take a look at the Canadian banking system, it's

Finance committee  Mr. Vincent, you said there's no study of a system with no regulation. Well, we do have, currently, no regulation. We have our experience of the last 30 or 40 years. In the last 30 or 40 years, interchange fees have not changed at all. The nature has changed, but the average inte