Nobel winner's economic take on credit card rules

February 22, 2010 7:11:26 PM PST
One Nobel prize winner in economics calls the new credit card changes a step in the right direction, but still not enough.

Joe Stiglitz is a professor at Columbia University, a former advisor to President Bill Clinton and a chief economist for the World Bank.

He says banks have conspired to extract as much money from Americans as they can, and still take part in a variety of anti-competitive and deceptive practices.

"Every time you go in the store and even use a debit card, not a credit card, but a debit card, your merchant gets charged," Stiglitz said. "And of course, the merchant has to pass on the cost to you. In the case of grocery stores where the margins are very thin, the credit cards are taking a substantial portion of their profits; they're up in arms over this."

Stiglitz says banks are prone to bad behavior and excessive risk taking and should be strongly regulated.