The present study, presented in Brussels, analyses whether sharing more comprehensive data improves the functioning of credit markets in European countries. Assuming that mechanisms to share data do exist, does a higher comprehensiveness in the data collected matter for credit markets? The study answers this by firstly analysing whether higher comprehensiveness in the data collected by credit reference agencies (CRAs) in the EU-28 can impact credit markets, and secondly, by analysing to what extent the sharing of nontraditional data, that is, data not directly related to credit activities, can contribute to wellfunctioning credit markets. The study has been co-authored by top researchers from the Center for European Policy Studies (CEPS) / European Credit Research Institute (ECRI) and the University of Edinburgh.
Comments by the study's sponsor ACCIS, member of SME Finance Forum:
"This report is the outcome of an independent study that has been sponsored by ACCIS. The study has tested two hypotheses:
- the more comprehensive the data in a credit reporting system, the better the functioning of credit markets in that country and the better the interest of consumers and lenders can be safeguarded; and
- non-traditional data sources can complement creditworthiness assessment for all types of borrowers and, in particular, for borrowers with “thin credit files” .
The originality and added value of the study is that, by adopting an econometric approach, the study is able to measure to what extent higher comprehensiveness in the data provided by credit reference agencies can impact credit markets. In particular, whether higher data comprehensiveness can impact a number of macroeconomic indicators, namely (i) financial inclusion, (ii) financial intermediation and (iii) the risk of missed repayments."
Read more here.
