The Economics of Financial Privacy: Regulation of Networks of Private Information in Credit Markets
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Global fmancial markets have undergone major changes in the past decade that are related to progressive market liberalization and the increasing adoption of information technologies. Financial service providers now produce and process vast amounts of personal data that is shared among credit grantors, via the intermediation of credit reporting agencies. The information networks that arise in this environment pose various problems to regulators, since they reveal strong concentration processes and, consequently, affect competition and allocative efficiency in the banking industry. These imperfections are reinforced by differing privacy regimes in the United States and Europe, which may imply regulatory drifts, distort competition and, in addition, represent „protectionist“ barriers.
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