Prepaid cards: an important innovation in financial services

This paper describes the characteristics of closed-system and open-system prepaid cards. Of particular interest is a class of open-system programs that offer a set of features similar to conventional deposit accounts using card-based payment applications. The benefits that open-system prepaid cards offer for consumers, providers, and issuing banks contribute to the increased adoption of these payment applications. Using these cards, consumers can pay bills, make purchases, and get cash from ATM networks. At the same time, consumers who hold prepaid cards need not secure a traditional banking relationship nor gain approval for a deposit account or revolving credit. By offering prepaid cards, issuing banks may meet the financial needs of consumers who may not otherwise qualify for more traditional banking products and these banks may do so with a card-based electronic payment application that essentially eliminates credit risk for the bank.Payment systems

How effective were the financial safety nets in the aftermath of Katrina?

This paper describes the U.S. financial system’s response to the destruction caused by Hurricane Katrina and examines how financial safety nets helped meet consumers’ needs in the aftermath of the storm. Overall, we find that consumers who hold deposit accounts at financial institutions are less vulnerable to financial disruptions than individuals who do not have either a checking or a savings account (the unbanked). The federal banking regulators’ and financial institutions’ responses to Hurricane Katrina, the financial vulnerability of unbanked families to this unexpected catastrophic event, and how the American Red Cross, FEMA, and the Gulf States’ relief efforts supplied financial assistance to Katrina’s victims are also addressed. Finally, we present several strategies that can be pursued to further safeguard the U.S. population and the financial community against extraordinary events.Hurricane Katrina, 2005 ; Unbanked

Enhanced thermal Hall effect in the square-lattice N\'eel state

Recent experiments on several cuprate compounds have identified an enhanced thermal Hall response in the pseudogap phase. Most strikingly, this enhancement persists even in the undoped system, which challenges our understanding of the insulating parent compounds. To explain these surprising observations, we study the quantum phase transition of a square-lattice antiferromagnet from a confining N\'eel state to a state with coexisting N\'eel and semion topological order. The transition is driven by an applied magnetic field and involves no change in the symmetry of the state. The critical point is described by a strongly-coupled conformal field theory with an emergent global $SO(3)$ symmetry. The field theory has four different formulations in terms of $SU(2)$ or $U(1)$ gauge theories, which are all related by dualities; we relate all four theories to the lattice degrees of freedom. We show how proximity of the confining N\'eel state to the critical point can explain the enhanced thermal Hall effect seen in experiment.Comment: 8+5 pages, 4+1 figure