"To Heap Distress upon Distress?" Comparative Reflections on Interest Rate Ceilings

Ramsay, Iain (2010) "To Heap Distress upon Distress?" Comparative Reflections on Interest Rate Ceilings. University of Toronto Law Journal, 60 (2). pp. 707-730. ISSN 0042-0220. (The full text of this publication is not available from this repository)

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Abstract

Interest-rate ceilings are often proposed as a protection for lower-income consumers in the credit market. Economists are generally sceptical of the protective role of ceilings, arguing that they often have undesirable substitution and exclusionary effects, may be circumvented, and hurt most those whom they are intended to protect. More competition, better information, and financial literacy are proposed as alternative policies, together with more effective redistribution through the social system. This was the conclusion of David Cayne and Michael Trebilcock in 1973 in their examination of the problem that 'the poor pay more.' Notwithstanding these economic critiques of ceilings, many European countries retain ceilings, and Japan recently lowered its existing ceiling. There does not seem to be an 'end of history' as nations converge on a 'modern' understanding of ceilings. This article sketches recent debates in the United Kingdom (no ceilings) and France (ceilings) where both countries view their policies as protection against financial exclusion. The author outlines the role of empirical knowledge and the value assumptions in these debates, raises the question of whether the differences represent distinct national cultural preferences, and suggests that explanations of consumer credit regulation should be sought in the dynamics of political interest-group influence and its institutional setting in both countries.

Item Type: Article
Subjects: K Law > K Law (General)
Divisions: Faculties > Social Sciences > Kent Law School > Centre for European and Comparative Law
Depositing User: Jenny Harmer
Date Deposited: 03 Aug 2011 14:41
Last Modified: 14 Apr 2014 12:48
Resource URI: http://kar.kent.ac.uk/id/eprint/28046 (The current URI for this page, for reference purposes)
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