Pyykkö, Elina (2012) Credit reporting: Towards better access to credit and protection for consumers. ECRI Commentary No. 9, March 2012. [Policy Paper]
Credit reporting addresses the fundamental problem of credit markets: information asymmetry between borrowers and lenders. By providing an efficient mechanism for evaluating risk, accurate credit information enables credit markets to function more effectively and at a lower cost than would otherwise be possible. Regulators and financial market actors therefore increasingly recognise the value of credit-reporting systems for the improved management of credit risk and as a tool to enhance access to credit, thereby contributing to sustainable economic growth and financial sector stability. When assessing the need for more regulation, however, this ECRI Commentary notes that credit-reporting systems are networks combining different industries for the benefit of more efficiency and security, and excessive regulation can work against the very objective of stable and efficient financial markets.
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