Global Financial Development
Report (GFDR) Seminar
Credit Reporting:
What Role for the State?
Miriam Bruhn (DECFP), Subika Farazi (FPDCE)
Martin Kanz (FPDCE)
1
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Introduction
• Why credit information matters
– Why share credit information?
(i) Risk-management and prudential regulation
asymmetric information
(ii) Promotion of credit discipline
moral hazard
• Credit information and the crisis
– New focus on credit information sharing for risk-management
and prudential regulation
– Need for comprehensive credit reporting. Identify barriers to the entry
of smaller players, non-regulated financial institutions
(important rapid growth of consumer finance in emerging markets)
2
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Introduction
• Evidence on the real effects of credit reporting
• Reduced default risk, lower interest rates (Padilla and Pagano, 2000)
• Improved financial access (Galindo and Micco, 2010, Brown et al., 2009,
Love and Mylenko, 2003, and Galindo and Schiantarelli, 2003)
• Improved stability of banking sector (Houston et al., 2010, Simovic, 2009)
especially important in rapidly growing consumer finance markets
• Credit reporting and financial access
• Reputational collateral for marginal borrowers (Miller, 2003)
• Inclusion of non-regulated lenders (NBFIs, MFIs)
3
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Introduction
• Today
How is the performance of credit reporting institutions affected by the
degree of competition and concentration in the banking sector?
• Policy implications: what role for the state?
– Transparency in credit reporting is closely linked to bank structure
– The state can play a useful role overcoming market failures and coordination
problems arising from bank concentration
– Smart regulation needs to provide incentives for transparency where the
market does not provide them (increasing social returns to scale)
-- Where registries and bureaus coexist their roles should be distinct and nonoverlapping to realize economies of scale to avoid crowding out
-- Support extension of credit reporting to non-regulated institutions, lower bar
-- Set and monitor standards for the type and quality of information provided
4
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Roadmap
1.
Introduction
-Why credit information matters
2.
The challenge of building transparent credit reporting systems
-When and why the market may not do it
-Bank concentration and credit reporting
-What role for governments in credit reporting?
3.
Empirical overview
- The nature and reach of credit reporting systems
- Bank concentration and credit reporting
4.
New Evidence
5.
Policy implications
5
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Problems in credit information sharing
• Monopoly rents in the market for credit information
– Banks (especially large banks) can capture monopoly rents and
prevent entry by not sharing information
– Increasing social returns of credit information sharing (Japelli and
Pagano, 1993, 2002)
– …but decreasing private returns of credit information sharing
– Coordination problems in information sharing among private lenders
• Implications
– Mere existence of credit reporting institutions may not be enough;
underlying bank concentration matters (closed user groups etc)
– Especially important barrier for the extension of credit reporting to
non-regulated/nontraditional lenders such as MFIs and NBFCs
6
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
The role of the state
The role of the state
•
What role for the state?
– Public good character of credit information sharing may justify
involvement of the state
•
Role of the state
(i) Regulator
(ii) Promoter
(iii) Operator of credit information systems
•
What should be the objective?
– Fix market failures (coordination problems among private lenders)
– Realize economies of scale where the market does not provide the right incentives
(lower barriers of entry for smaller players NBFCs, MFIs)
– Set data quality and reporting standards
7
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Bank concentration and credit reporting
• How does bank concentration affect credit reporting?
(i) Emergence of credit reporting institutions
(ii) Institutional participation in credit reporting
(iii) Extent of information collected and distributed
Countries with
low bank
concentration
Countries with
high bank concentration
Credit Registry?
.56
.37
Credit Bureau?
.80
.39
Credit bureau or registry?
.92
.53
• Can state involvement help?
• Are there complementarities between public and private credit reporting?
8
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Institutional Participation in Credit Reporting
Credit Reporting Institutions
Credit bureau
A
SS
SA
EC
D
O
EN
A
M
LA
C
EC
A
EA
P
0
20
40
60
80
by Type and Region
Credit registry
• Large variation in type of credit reporting institutions across regions
• Legal origin and credit institutions:
Anglo-Saxon countries typically stronger creditor rights, less state involvement
9
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Institutional Participation in Credit Reporting
Total Credit Listed
Credit listed in largest bureau
A
SS
SA
EC
D
O
M
EN
A
LA
C
EC
A
EA
P
0
20
40
60
80
100
as % of GDP
Credit listed in credit registry
• Different ways of measuring the coverage of the credit reporting system
• Financial stability: volume of credit listed
• Financial access: number of individuals covered
10
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Institutional Participation in Credit Reporting
Who Provides Information to Credit Registries?
Who Provides Information to Credit Bureaus?
EAP
EAP
ECA
ECA
LAC
LAC
MENA
MENA
OECD
OECD
SA
SA
SSA
SSA
Banks
NBFCs
MFIs
Banks
NBFCs
MFIs
Functional Differentiation
• Private bureaus collect more information from non-bank/non-regulated lenders
• Potential limitations of registry for risk-management in emerging markets with large
NBFI share
• Strong case for private bureau if target is incorporation of MFIs, NBFIs
11
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Depth of Credit Information
Information Collected
Information Collected
Credit Registries
Credit Bureaus
EAP
EAP
ECA
ECA
LAC
LAC
MENA
MENA
OECD
OECD
SA
SA
SSA
SSA
Personal
Loan
Repayment
Personal
Loan
Repayment
It’s not just ownership that matters…
• Variation in the type and quality of information collected
• Bureaus do more active monitoring…
• …and collect more repayment information
12
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Bank concentration and credit reporting
Participation in Credit Reporting
.6
BRA
CRI
.4
COL
CHL
PAR MYS
MEX
DOM
ECU
GBR
BOL
NIC
BIH
URY
HND
RUS
GTM
PAN
TTO
AUS
RWA
.2
CAN
THA MAR
PNG
NPLGER
KENPAK
HUN
ESP
UGA
ARE
BGR
ISR
SLV
LKA
0
LTU
CHE
ISL
PHL
BHR
KGZ
SIN
MAC
IRN
TUR
KOR
UKRSAU
SDN
BGD
IDN
IRL
HRV
HKG
PER
LVA
NGA
JPN
ARM
DEN
ITA
AUT
POL
ROM
CZE
-.2
EST
GEO
EGY
IND
TUN
SVN
LEB
BHS
-.4
SWZ
BWA
ZMB
ARG
.25
ZAF
KAZ
SLE FIN NER
BDI
ETH
TCD
BFA MDG
MLI
GHA
MRT
MDVYEM BEN
NLD
LSO
MNG
SEN CMR
AGO
AZE
CIV
COR
ALB
BLR
KWT
CPV
SVKALG
SWE GUY
GAB
JPN
CHN
BLZ
MRU
LBY
BRB
ANU
QAT
CYP
PRT
NOR
.5
.75
1
Bank concentration
b= -.48, R2=.12
13
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Bank concentration and credit reporting
Information Collected
.6
ZMB
MAR
COL BRA
GBR
NIC
ARE
.4
RUS
GTM
.2
PAN
JPN
IND
HND
KEN
KAZ
UGA GEO
CRI
EGY
LKA TTOARM
BHR
BGR
SLV
MAC
NPL
ECU
KGZ
BIH BOL
KWT
SAUHRV
ITA
MYS
POL
TUR
GER
DOM
ROM
SVK
AUT
CZE
MEX
THA
CHL
0
UKR
-.2
PHL
ZAF SIN
CHE
RWA
SWZ
BWA
PAK
HUN
AUS
FIN
URY
CYP
NLD
ESP
KOR
BGD
SDN
NGA
PAR
TUN
LEB
LVA
HKG
-.4
BHS
.25
IRN
PNG
EST
CAN
ARG
LTU
IDN
PER
SVN
IRL
BDI
GHA
ETH
SLE
NER
TCD
MLI
BFA DEN
MDG
MDV
BEN
LSO
MRT
SEN CMR
CHN
MNG
YEM
CIV
AZE
AGO
GUY
CPV
COR
JPN
ALB
BLR
ALG
ISR
BLZ
MRU
GAB
PRT
ANU LBY
BRB
ISL
SWE
NOR
QAT
.5
.75
1
Bank concentration
b= -.47, R2=.10
14
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Bank concentration and credit reporting
Information Distributed
.6
KAZ
UGA GEO
COL
.4
ZMB
MAR EGY
GBRNIC
RUS
BRA
LKA
TTO
SLV
BGR
ECU
ARE
GTM
NPL
BOL DOM SAUHRV
PAN
.2
JPN
GER
POL
ROM
CZE
MEX
AUT
THA
IND
0
PAK
UKR
URY
ZAF
BGD
SDN
LVA
HKG
BWA
SWZ
PNG
IDN
PER
SVN
IRL
EST
CYP
BDI
GHA
ETH
NLD
SLE FIN NER
TCD
MLI
BFA MDG
BEN
MDV
LSO
DEN CHN
MRT
SEN CMR
MNG
YEM
CIV
AZE
AGO
GUY
CPV
COR
JPN PHL
ALB
BLRALG
ISR
BLZ
MRU
GAB
PRT
ANU LBY
BRB
NOR
QAT SWE ISL
-.4
BHS
SIN
CHE
AUS
HUN
ESP
KOR NGA
PAR
TUN
LEB
IRN
RWA
HND
ARG
LTU
SVK
TUR
CAN
CHL
BHR
MAC
KGZ
KWTITA
BIH
MYS
-.2
ARM
CRI KEN
.25
.5
.75
1
Bank concentration
b= -.48, R2=.12
15
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Bank concentration and the emergence of credit reporting
Pr[Credit Registry]=1
Probit
Bank concentration
Per capita GDP
Private Credit/GDP
Probit
Probit
Probit
Probit
Probit
Probit
-0.204
-0.191
0.076
-0.547**
-0.502**
-0.457**
-0.529***
(0.220)
(0.230)
(0.275)
(0.299)
(0.226)
(0.233)
(0.203)
(0.200)
-0.041
-0.030
-0.018
-0.053
0.037
0.044
0.070**
0.088**
(0.037)
(0.037)
(0.040)
(0.053)
(0.033)
(0.032)
(0.034)
(0.038)
-0.003*
-0.002*
-0.002
-0.002
0.002*
0.002
0.002
0.001
(0.001)
(0.001)
(0.001)
(0.002)
(0.001)
(0.001)
(0.002)
(0.002)
0.131
0.152
0.027
-0.076
-0.104
-0.175
(0.106)
(0.118)
(0.133)
(0.093)
(0.096)
(0.111)
Creditor rights
-0.042
0.044
0.025
0.012
(0.042)
(0.053)
(0.036)
(0.041)
French legal origin
German legal origin
Transition legal origin
R-squared
Probit
-0.312
Contract enforcement
Number of observations
Pr[Credit Bureau]=1
0.601***
-0.211**
(0.098)
(0.106)
0.348***
-0.331
(0.079)
(0.211)
0.036
-0.396*
(0.193)
(0.234)
135
132
115
111
135
132
115
111
0.070
0.072
0.072
0.281
0.139
0.141
0.249
0.286
Note: *** p<0.01, ** p<0.05, * p<0.1
• Going from the 25% to the 75% percentile in bank concentration (from 56% to 89%) is
associated with a 17 percentage point lower likelihood of having a credit bureau
• Countries with French and German legal origin are more likely to have a credit registry,
but less likely to have a credit bureau, compared to countries with British legal origin
16
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Robustness check: Instrumental variables strategy
• Results remain unchanged when using an instrumental variables strategy
with the following instruments for bank concentration and institutions
(i.e. creditor rights, contract enforcement)
– Banking applications denied
– Legal origins
– Region
Second stage
yi    1concentrationi   2institutionsi   ' Xi   i
First stage
concentrationi  1   1appdenied _ i   2legor   3region   ' Xi   i
institutionsi  2   1legori   2 appdenied i   3regioni   ' Xi   i
17
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Bank concentration and the
reach of credit reporting institutions
Credit listed/GDP, credit registry
OLS
Bank concentration
Per capita GDP
Private credit/GDP
-0.024
(0.152)
0.049
(0.031)
0.002
(0.002)
Contract enforcement
OLS
0.060
(0.163)
0.057*
(0.032)
0.002
(0.002)
0.086
(0.078)
Creditor rights
OLS
0.174
(0.217)
0.070*
(0.038)
0.002
(0.002)
0.136
(0.090)
0.028
(0.036)
French legal origin
German legal origin
Scandinavian legal origin
Number of observations
Adjusted R2
0.392
(0.245)
0.068*
(0.039)
0.002
(0.002)
0.097
(0.094)
0.049
(0.037)
0.319***
(0.113)
0.515**
(0.240)
OLS
-0.517*
(0.289)
0.032
(0.056)
-0.001
(0.002)
OLS
-0.444*
(0.260)
0.042
(0.057)
-0.001
(0.002)
0.173
(0.107)
OLS
-0.368
(0.293)
0.060
(0.071)
-0.002
(0.002)
0.230*
(0.124)
0.086*
(0.047)
OLS
-0.383
(0.346)
0.093
(0.090)
-0.002
(0.003)
0.252*
(0.149)
0.056
(0.040)
-0.262
(0.223)
-0.384
(0.236)
-0.343**
-0.300
0.295
-0.946
-1.599*
(0.307)
-0.118
(0.197)
-1.704*
(0.429)
(0.646)
(0.970)
(1.025)
-0.189
-0.853
-1.390*
(0.159)
0.150
(0.116)
-1.545*
(0.242)
(0.584)
(0.763)
(0.797)
Transition legal origin
Constant
Credit listed/GDP, credit bureau
OLS
130
127
110
110
101
99
85
85
0.045
0.047
0.074
0.173
0.023
0.037
0.063
0.079
Note: *** p<0.01, ** p<0.05, * p<0.1
• Higher bank concentration is associated with a lower volume of credit listed in
the credit bureau
18
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Bank concentration and the quality of collected credit information
Credit registry
Bank concentration
Contract enforcement
Creditor rights
Per capita GDP
Private credit/GDP
Crisis 1970-2000
French legal origin
German legal origin
Scandinavian legal origin
Transition legal origin
Constant
Number of observations
Adjusted R2
Credit bureau
Overall
Personal
Loan
Repayment
Overall
Personal
Loan
Repayment
OLS
OLS
OLS
OLS
OLS
OLS
OLS
OLS
-0.012
(0.134)
-0.060
(0.057)
0.020
(0.020)
-0.032
(0.022)
-0.000
(0.001)
-0.086
(0.055)
0.268
(0.057)
0.199
(0.074)
-0.024
(0.087)
0.048
(0.114)
0.762
(0.456)
-0.042
(0.138)
-0.037*
(0.059)
0.009
(0.021)
-0.045
(0.023)
-0.000
(0.001)
-0.118
(0.056)
0.264
(0.064)
0.206
(0.070)
0.012
(0.088)
0.013
(0.116)
0.809
(0.458)
0.028
(0.171)
-0.075*
(0.068)
0.034
(0.026)
-0.021
(0.026)
-0.001
(0.001)
-0.072
(0.065)
0.311
(0.070)
0.253
(0.089)
-0.080
(0.108)
0.054*
(0.148)
0.775
(0.550)
-0.098
(0.178)
-0.081*
(0.073)
0.033
(0.026)
-0.047
(0.028)
0.000
(0.001)
-0.099***
(0.077)
0.355**
(0.069)
0.264**
(0.110)
0.035
(0.115)
0.130*
(0.147)
0.999
(0.616)
-0.378*
(0.182)
-0.007
(0.096)
0.047
(0.030)
0.062
(0.027)
-0.002
(0.001)
-0.037
(0.064)
-0.046
(0.074)
0.032
(0.095)
-0.266
(0.124)
0.019
(0.149)
0.217
(0.803)
-0.420*
(0.176)
-0.050
(0.094)
0.048
(0.029)
0.037
(0.026)
-0.002
(0.001)
-0.070
(0.063)
-0.049
(0.071)
-0.023
(0.088)
-0.106
(0.151)
-0.100
(0.140)
0.714
(0.761)
-0.355
(0.209)
0.008
(0.108)
0.030
(0.031)
0.051*
(0.035)
-0.002*
(0.001)
-0.001
(0.075)
-0.017
(0.087)
0.148
(0.116)
-0.318
(0.118)
0.106*
(0.172)
0.163
(0.926)
-0.534
(0.228)
-0.035
(0.134)
0.073
(0.040)
0.106*
(0.034)
-0.003
(0.001)
-0.014
(0.077)
-0.066
(0.097)
0.056
(0.128)
-0.445
(0.157)
-0.022*
(0.180)
0.287
(1.085)
115
115
115
115
107
107
103
107
0.151
0.180
0.143
0.119
0.115
0.077
0.065
0.196
Note: *** p<0.01, ** p<0.05, * p<0.1
• Higher bank concentration is associated with a lower quality of the information
collected by the credit bureau
19
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Bank concentration and the quality of distributed credit information
Credit registry
Bank concentration
Contract enforcement
Creditor rights
Per capita GDP
Private credit/GDP
Crisis 1970-2000
French legal origin
German legal origin
Scandinavian legal origin
Transition legal origin
Constant
Number of observations
Adjusted R2
Credit bureau
Overall
Personal
Loan
Repayment
Overall
Personal
Loan
Repayment
OLS
OLS
OLS
OLS
OLS
OLS
OLS
OLS
-0.104
-0.131
-0.071
-0.160
-0.368*
-0.383*
-0.391
-0.509
(0.123)
(0.135)
(0.146)
(0.167)
(0.169)
(0.185)
(0.195)
(0.225)
-0.053
-0.041*
-0.062*
-0.056*
0.010
-0.068
0.037
-0.013
(0.057)
(0.057)
(0.062)
(0.073)
(0.090)
(0.094)
(0.104)
(0.132)
0.029
0.021
0.040
0.026
0.050
0.046
0.036
0.082
(0.020)
(0.021)
(0.024)
(0.025)
(0.028)
(0.029)
(0.030)
(0.040)
-0.031
-0.057
-0.016
-0.041
0.059
0.038
0.049*
0.104*
(0.021)
(0.022)
(0.023)
(0.026)
(0.025)
(0.027)
(0.033)
(0.034)
-0.000
-0.000
-0.001
0.000
-0.002
-0.002
-0.002*
-0.003
(0.001)
(0.001)
(0.001)
(0.001)
(0.001)
(0.001)
(0.001)
(0.001)
-0.087
-0.125
-0.066
-0.107***
-0.023
-0.050
0.016
-0.012
(0.052)
(0.056)
(0.059)
(0.075)
(0.060)
(0.069)
(0.069)
(0.075)
0.244
0.264
0.237
0.313**
-0.061
-0.066
-0.033
-0.074
(0.058)
(0.066)
(0.067)
(0.069)
(0.069)
(0.073)
(0.080)
(0.095)
0.184
0.202
0.191
0.252**
0.009
-0.029
0.143
0.030
(0.071)
(0.070)
(0.079)
(0.105)
(0.090)
(0.092)
(0.115)
(0.129)
-0.003
0.058
-0.064
0.039
-0.275
-0.111
-0.274
-0.469
(0.088)
(0.096)
(0.099)
(0.111)
(0.111)
(0.133)
(0.114)
(0.148)
0.041
0.023
0.020*
0.127*
0.051
-0.129
0.157*
0.034*
(0.113)
(0.120)
(0.129)
(0.140)
(0.145)
(0.139)
(0.166)
(0.185)
0.761
0.943
0.703
0.861
0.079
0.788
-0.029
0.111
(0.450)
(0.447)
(0.501)
(0.606)
(0.746)
(0.780)
(0.862)
(1.061)
115
0.129
115
0.171
115
0.098
115
0.093
107
0.138
104
0.068
103
0.097
107
0.203
Note: *** p<0.01, ** p<0.05, * p<0.1
• Higher bank concentration is associated with a lower quality of the information
distributed by the credit bureau
20
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Credit registries and bureaus: complements or substitutes?
Registries and bureaus:
• Some anecdotal evidence of crowding out
Bosnia and Herzegovina: public registry has no cutoff
80
70
60
50
40
30
20
10
0
2003
2004
2005
2006
Public registry coverage (% of adults)
2007
2008
2009
2010
Private bureau coverage (% of adults)
Source: Doing Business and Mylenko 2011
21
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Credit registries and bureaus: complements or substitutes?
Credit bureau
Registry=1
Bank concentration
Contract enforcement
Creditor rights
Per cpita GDP
Credit/GDP
French legal origin
German legal origin
Transition legal origin
Exists=1
Credit listed/GDP
2005-2010
Institutional
participation
Information
collected
Probit
OLS
OLS
OLS
-1.048**
-0.249*
-0.085
-0.146**
(0.411)
(0.127)
(0.059)
(0.067)
-2.191**
-0.353
-0.406**
-0.334**
(0.975)
(0.336)
(0.168)
(0.168)
-0.635
0.264*
0.051
0.020
(0.509)
(0.150)
(0.067)
(0.092)
0.054**
0.102
0.071*
0.025
(0.188)
(0.042)
(0.028)
(0.028)
0.351**
0.081
0.065***
0.058**
(0.147)
(0.087)
(0.022)
(0.027)
0.004
-0.002
-0.000
-0.002**
(0.008)
(0.003)
(0.001)
(0.001)
-0.298
-0.127
0.027
0.026
(0.475)
(0.180)
(0.071)
(0.081)
-0.528
-0.285
-0.098
0.085
(0.635)
(0.201)
(0.087)
(0.096)
-1.066*
-0.095
0.035
0.033
(0.646)
(0.198)
(0.100)
(0.141)
Scandinavian legal origin
Constant
Number of observations
R2
-0.345
-0.188
-0.299**
(0.305)
(0.128)
(0.123)
4.560
-1.660
-0.214
0.058
(4.001)
(1.067)
(0.566)
(0.749)
111
85
107
107
0.328
0.216
0.289
0.232
note: *** p<0.01, ** p<0.05, * p<0.1
• Evidence suggests credit registries may crowd out credit bureaus
22
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Credit registries and bureaus: complements or substitutes?
Credit bureau
Exists=1
Credit listed/GDP
2005-2010
Institutional
participation
Information
collected
Probit
OLS
OLS
OLS
RegistryXConcentration
Registry=1
Bank concentration
Contract enforcement
Creditor rights
Per capita GDP
Credit/GDP
French legal origin
German legal origin
Transition legal origin
0.570
R2
-0.717**
-0.061
(0.292)
(0.428)
(0.751)
(0.282)
-0.517*
-1.302**
0.391*
-0.106
(0.291)
(0.579)
(0.202)
(0.203)
-0.862**
-1.297*
0.014
-0.299
(0.370)
(0.682)
(0.247)
(0.215)
-0.108
0.274*
0.035
0.019
(0.092)
(0.148)
(0.064)
(0.093)
0.021
0.083*
0.018
0.053*
(0.033)
(0.043)
(0.027)
(0.028)
0.057**
0.065*
0.094
0.058**
(0.035)
(0.085)
(0.023)
(0.028)
0.001
-0.003
0.000
-0.002**
(0.001)
(0.003)
(0.001)
(0.001)
-0.077
-0.187
0.043
0.028
(0.093)
(0.183)
(0.072)
(0.083)
-0.166
-0.332
-0.079
0.086
(0.200)
(0.214)
(0.081)
(0.098)
-0.381
-0.192
0.066
0.036
(0.247)
(0.218)
(0.105)
(0.144)
-0.167
-0.270**
-0.306**
(0.293)
(0.135)
(0.121)
Scandinavian legal origin
Number of observations
1.623**
111
0.253
85
0.291
107
0.339
107
0.232
note: *** p<0.01, ** p<0.05, * p<0.1
• But: existence of a registry may also help break banks’ information monopoly
23
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Policy implications
• Transparency in credit reporting matters
– Financial access and inclusion
– Financial stability and prudential regulation
• Degree of state involvement varies
– …but it’s not only the ownership of credit reporting systems that matters
• Promoting credit information cannot be isolated from credit market
competition more broadly
• Bank concentration also determines quality of credit reporting
– Smart regulation needs to understand concentration of the banking sector
– Private credit reporting may not emerge without state intervention if bank
concentration is high
•
Country examples: market failure, capture of credit reporting systems by small
number of banks if bank competition not taken into account
24
Introduction
Roadmap
Background
Evidence: Bank Concentration and Credit Reporting
Policy Implications
Additional research
• Would like to study how different types of government interventions
can promote the emergence of a private credit bureau when bank
concentration is high
(i) Regulation
(ii) Mandatory information sharing
• Currently do not have good cross-country data on credit information
regulation…
• …suggestions for data sources and additional research questions?
25