Lars Oxelheim: This paper addresses price regulations and the fallacies when the state sets the price in a potentially competitive market. The paper focuses on the case of electronic interbank credit transfer service in Thailand and provides a detailed presentation of the cost and organizational structure of that market. It concludes that price fixing exists not only for the final consumer services, but also for intermediate services. We also learn that the Bank of Thailand (BoT) has only taken slow steps in dismantling its price regulations that serve as a platform for price collusion among commercial banks.

I find this paper well written on a topical issue. It is normative and ends with distinct policy recommendations. It provides four policy recommendations regarding how to introduce price competition in the electronic payment service market in Thailand and four recommendations regarding how to enhance the monopolistic clearing system, National ITMX.

My major...

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