ASIA-PACIFIC FINANCIAL FORUM
Session 1:
Report on Credit Bureau Work Stream
Dr. Michael A. Turner—President & CEO, PERC
7 July 2014
Seattle, Washington USA
• Broad consensus around full-file,
comprehensive reporting with strong
private credit bureau.
– World Bank General Principles for Credit
Reporting (2011)
• IFC, CGAP, global group of experts
– OECD Fair Information Principles (1973)
– Endorsed by advocacy groups:
• Accion FI 20/20
• Alliance for Financial Inclusion
• Asia Pacific Credit Coalition (APCC)
• BUT still variance in reporting regimes
across APEC 21 member economies.
Credit Bureau Development
• Assist in reform process to catalyze credit
bureau development by targeting economies
that are clustered in terms of the regulatory
gaps and hurdles they face
• Proposed Work Plan:
– Gap analysis: review of regulations in
potential pathfinder economies along key
aspects of credit bureau regulation
– Identify strategic policymakers with
authority over issues
– Collaborate with stakeholders to discuss
regulatory frameworks
Issues identified during Gap
Analysis (I)
• Some economies are in the process of
developing models of regulatory
enforcement.
– The number of models they are examining may be
too few, leaving approaches that are not calibrated
to capacity and local needs.
– These economies need assistance in developing
models of regulatory enforcement.
– There is an absence of resource material that help
provide a comprehensive set of models for
regulatory enforcement
Focus of workstream (I)
• Regulatory enforcement:
– Provide different models of regulatory
enforcement from different economies;
– Help calibrate models to regulator
capacities.
Issues identified during Gap
Analysis (II)
• Regulations for ownership
– While there have been caps in some economies on
foreign ownership, there have been few guidelines
on ownership models that can cause conflicts of
interest, such as data user ownership.
– In some economies, the rule for core functions such
as mandatory reporting and scoring are different for
public registries and private bureaus, raising
questions of competitive effects.
Focus of Work Stream (II)
• Ownership:
– Identify effects of different ownership
forms on competition, financial access
and responsible lending;
– Provide a comprehensive list of
variations in ownership regulation
beyond public-private, foreigndomestics.
PERC Study #1
• We engaged bureaus, regulators and industry experts
in 23 economies
– (2 in Africa, 4 in East Asia, 8 in Europe, 8 in Latin America, and 1 in
South Asia).
• Surveying for commonalities and differences among
nations in:
– Enforcement regimes and ownership structures
• Europe and Latin America have longer histories with
credit reporting than do Asia or Africa.
• More than half of the economies we examined are
emerging ones.
Frequency of Government Audits
0%
5%
Weekly
10%
15%
20%
5%
3-4 Times per year
5%
1-2 Times per year
5%
Yearly
Other
30%
35%
40%
9%
Monthly
Less than Yearly
25%
23%
18%
36%
Auditor by Domain
Execution of Oversight
Efficacy of Audits on Performance
45%
39%
40%
35%
30%
26%
25%
22%
20%
15%
13%
10%
5%
0%
Very effective
Moderately effective
Mildly effective
Not effective at all
Ownership Structures
Case of Mexico:
COFECE Recommendations
1. Define property rights clearly such that an anonymous
database can be used for research and value added
services
2. Set stronger penalties against misuse of CRA data
3. Incorporate private and public credit services providers
and public sector utilities still outside the system
4. Set standards to improve the quality, homogeneity and
completeness of credit histories
5. Vertical separation between CRAs and users
6. Adopt a sharing or interconnection regulation more
conducive to entry by new CRAs
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PERC Study #2
• We examined 45 countries that implemented full file
credit reporting between 1999 and 2011
– World Bank Doing Business
– BankScope
– Levine, Berth, and Caprio (180 countries)
– World Development Indicators
– Credit Reporting Database (195 countries)
– Global Financial Development Database (203 countries)
Financial Market Impacts:
Increased Competition
Conclusions
1. Evidence does not support one-size fits all approach
2. Issue of ownership structure looms large (Brazil vs.
Mexico).
3. Wide variance in enforcement regimes with solid impact
on efficiency of credit bureaus.
4. Impacts analysis by APCC/PERC forthcoming.
5. Path finders—engaged Indonesia (full-file and
enforcement), Philippines (ownership—PCR mandatory
and private only voluntary) and Mexico (ownership) in
terms of reform.
6. Real questions remain for these and other APEC
member economies.
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