PERCPERC’s new study The Impacts of Information Sharing on Competition in Lending Markets specifically explores whether bank concentration falls following a shift to full-file credit sharing.  

The key findings from the research include:

  • Shifts to full-file credit reporting are not associated with meaningful changes in bank concentration/market power, and
  • Consistent with past findings, greater information sharing is associated with increased private sector lending.

PERC’s analysis of economies that switched to full-file reporting between 1997 and 2011 finds little evidence to support some banks’ fears that sharing full-file credit information enables poaching and cream skimming by competitors, at least as measured by banking concentration in national lending markets.  The expected massive disruptions in the market may have failed to materialize because lenders adapt to the new environment helping keep their relative shares of the market. The transition to full file data sharing usually takes years. Consequently, lenders have time to adapt.  Because increased information sharing does improve lending efficiencies and enable expanded lending overall, lenders may also expand into new markets rather than poaching from each other.

“Lenders should temper their fears regarding full-file reporting given its benefits and the lack of strong supporting evidence of ensuing cutthroat competition,” commented PERC President and CEO Dr. Michael Turner.

The report can be downloaded on PERC’s website here: