Authors: Michael s. Barr, Sendhil Mullainathan and Eldar Shafir
Publication: Asset Building Program, New America Foundation, October 2008
Abstract: Financial services decisions can have enormous consequences for household well-being. Households need a range of financial services—to conduct basic transactions, such as receiving their income, storing it, and paying bills; to save for emergency needs and long-term goals; to access credit; and to insure against life’s key risks. But the financial services system is exceedingly complicated and often not well-designed to optimize household behavior. In response to the complexity of our financial system, there has been a long-running debate about the appropriate role and form of regulation. Regulation is largely stuck in two competing models—disclosure, and usury or product restrictions.