A Conference on Consumer Protection in Financial Product Markets

A conference organized by the Federal Reserve Bank of Cleveland engendered an informative discussion of consumer protection in financial products markets. Anticipating significant changes in financial regulation, the conference asked the question, “How could regulators successfully protect consumers?” It intentionally looked beyond the existing institutions. The first of three panels discussed how consumers gather information and process it to make purchase decisions. Lessons learned from research on food labeling and shopping were discussed. Another panel examined the roles of professionals who guide consumers through a marketplace. Panelists discussed the legal obligations of brokers and rating agencies. The final panel focused on product preapproval processes like the FDA’s regulation of pharmaceuticals and the Consumer Product Safety Commission’s post-market tracking of injuries. This Policy Discussion Paper summarizes the presenters’ material and draws out themes that point a way forward for efficient, competitive financial product markets that are safe for consumers. [NOTE: This issue is available only on-line. It was not printed. Also, the publication of Policy Discussion Papers ended with this issue.]