Credit system and international economy

Author: Margaret Miller (USA)
Publisher:
Publish Date: 2004-09-01
Features: The credit reference system is an important component of the financial system in developed countries, but it is generally weak or even absent in developing countries. The credit reference system reflects a fundamental issue in the credit market: information asymmetry between borrowers and lenders, and the resulting adverse selection is moral hazard. The core of a credit report is that it provides repayment history information for individuals and enterprises, allowing lenders to more accurately assess credit risk, thereby reducing loan review time and lowering loan costs. Credit reports also strengthen borrowers' self-discipline, as a borrower's default with one institution will lead to other institutions refusing to lend to them. This book is a comprehensive summary of the development of credit reference systems worldwide. It introduces the theoretical and empirical experiences of how credit reference affects financial markets through examples from developing and developed countries. The analysis in this book shows that credit reference plays a significant role in predicting the default risk of potential borrowers and increasing the volume of credit transactions. The book also explores the role of public policy in the development of the credit reference industry, including the functions of public credit reference departments managed by central banks, as well as the impact of legal, regulatory, and institutional factors on the development of the credit reference industry.