The Regulation of Financial Privacy: The United States vs Europe. ECRI Research Reports No. 5, 1 June 2003

Jentzsch, Nicola. (2003) The Regulation of Financial Privacy: The United States vs Europe. ECRI Research Reports No. 5, 1 June 2003. UNSPECIFIED.

Preview

PDF - Published Version Download (342Kb) | Preview

Abstract

[From the Introduction] The consumer credit market depends on the exchange of personal information among market participants. Credit bureaus are the primary repositories of this information, and in recent years they have gathered a vast amount of data on creditworthiness of individuals. Currently Europe as well as the United States are planning large-scale overhauls of their regimes of information sharing in consumer credit markets. In Europe, a new proposal for a directive on consumer credit is discussed, whereas in the US, key provisions of the Fair Credit Reporting Act are expiring by the end of 2003. Until recently, however, there has been little independent research on the far-reaching implications of privacy regulations in consumer credit markets. There has also been little quantitative analysis of the effects of differing regulatory environments on both credit reporting agencies and the efficiency of the consumer credit market. The present study fills that gap by analysing the economic effects associated with different financial privacy regimes. The US are contrasted with the European Union (with Germany, Great Britain and France as reference countries) to analyse the differences in the privacy regimes and their effects on consumer credit markets. There are less privacy regulations in the US and credit bureaus compete on a nationwide scale. In the EU, on the other hand, data protection and credit reporting schemes differ from one country to another. Americans enjoy broad access to credit, but this is correlated with greater indebtedness, whereas in the EU, credit markets are thinner and households are in general less indebted.

Actions (login required)