Information Sharing And Credit Rationing: Evidence From The Introduction Of A Public Credit Registry
The authors provide the first evidence on how the introduction of information sharing via a public credit registry affects banks' lending decisions. They employ a unique dataset containing detailed information on credit card applications and decisions from one of the leading banks in China. While they do not find that information sharing decreases credit rationing on average, the distribution of granted credit among borrowers with shared information has a unique pattern. In particular, compared to those with information reported only by this bank, borrowers with extra information shared by other banks receive higher credit card lines.