An intellectual property-based approach to the mandatory disclosure among lenders of credit data for small and medium enterprises

In the United Kingdom as well as Europe there is a lot of momentum behind proposals to mandate the sharing of credit data for small and medium enterprises (SMEs) more widely than is currently the case. Such information sharing would facilitate greater competition among lenders by making it easier fo...

Full description

Saved in:
Bibliographic Details
Published inJournal of banking regulation Vol. 17; no. 4; pp. 288 - 295
Main Author Siciliani, Paolo
Format Journal Article
LanguageEnglish
Published London Palgrave Macmillan UK 01.11.2016
Palgrave Macmillan
Subjects
Banking
Disclosure
Economics and Finance
Finance
Financial Law/Fiscal Law
Information sharing
Intellectual property
Lines of credit
Original Article
Small & medium sized enterprises-SME
United Kingdom > UK
credit data
competition law
SME lending
Online AccessGet full text

Cover

More Information
Summary:In the United Kingdom as well as Europe there is a lot of momentum behind proposals to mandate the sharing of credit data for small and medium enterprises (SMEs) more widely than is currently the case. Such information sharing would facilitate greater competition among lenders by making it easier for rivals (that is, non-bank ones in particular) to identify and compete for good SME borrowers. However, a trade-off may emerge between good SME borrowers with a credit history and potentially good SME borrowers without one, given that lenders’ ability to offer low rates to untested borrowers is curtailed by the prospect of rivals’ poaching once their creditworthiness is revealed. Hence, in order to maximise the benefits of information sharing, a time-limited exemption for new SME borrowers is proposed to ensure that lenders’ incentives are not skewed against them.
ISSN:1745-6452
1750-2071
DOI:10.1057/jbr.2015.25