Rules for the granting of credit rating of natural and legal persons, through an integrated information system, and the establishment of an independent authority with the name “Independent Credit Rating Authority”, provides for the bill of the Ministry of Finance that is put before the Plenary today, Wednesday.
The main task of the Credit Evaluation Authority is the collection and evaluation of primary information of the State and the calculation of the probability of payment default for natural and legal persons.
Every interested citizen, business and public or private sector entity will be able, upon request, to receive – free of charge from the Authority – their credit rating, which will form the basis for new financing opportunities.
The processing of financial behavior data and credit ratings will be confidential, conducted only by the Independent Credit Rating Authority, while access to the System data by other entities will be prohibited.
The Authority will enjoy operational independence, as well as administrative and financial autonomy, while it will not be subject to control or supervision by government bodies, state agencies or other Administrative Authorities.
With the creation of the Central Credit Register, which will be kept at the Bank of Greece, a detailed record will be made of the history of payments, the types of collateral provided and any other information related to any form of credit to natural or legal persons, from credit and financial institutions.
In the previous days, during the discussion of the bill in the Economic Affairs Committee of the Parliament, Christos Staikouras underlined that now “the problem of asymmetric information, between creditors and debtors and between creditors, in terms of the creditworthiness of citizens and businesses is being addressed”. “Asymmetric information leads to undesirable outcomes, such as, for example, that creditors tend not to approve the loan applications of borrowers with sufficient creditworthiness – in the absence of data on their debts to the State – or that borrowers borrow more money than what they are able to repay, so new bad loans are created,” the finance minister said.
“The Independent Credit Rating Authority will exchange information and data with all credit rating agencies, such as Teiresias, in order for the public, as well as financial institutions, to have a complete picture of all the debts of individuals and businesses,” said the rapporteur of ND Manolis Konsolas.
“The problem for not lending to small and medium-sized enterprises is not the asymmetric information of the banks about debts to the public and the funds. The problem is that the credit institutions have excluded 96% of the enterprises as insolvent, as has been said by central banker,” said SYRIZA rapporteur Nikos Pappas, who commented: “Why aren’t Greek businesses getting loans? Because there isn’t enough information? Are we being fooled? Greek businesses are not considered solvent because they have accumulated debt from the chronic crisis.”
“These provisions show the complete mismatch of the government’s priorities with the needs and the state of Greek society”, said the special buyer of PASOK-KINALL Nadia Giannakopoulou and observed: “The government institutes credit rating registers, while the auctions are increasing, arrears to the public are also increasing, that one in three loan arrangements is going red again and that there is, literally, no first home protection system”.
“The dilemma, growth and stability or regression, raised by the Prime Minister, is both false and misleading. Today, we are experiencing exactly these gloomy results of capitalist development, which for the people translates into legal theft of the people’s income, translates into instability, into insecurity, an attack on his life and rights”, said KKE expert Manolis Syntyhakis.
“We are against all those independent authorities that are not provided for by our Constitution,” said the special buyer of the Hellenic Solution Vassilis Viliardos. The deputy pointed out that “this system works in the United States, it has shown serious problems and it is certainly not a panacea”.
“We clearly see the Government proceeding with the introduction of the institution of credit score, following exactly the standards of the United States”, said the special buyer of MeRA25 Fotini Bakadima and warned that in the USA, the credit score is the absolute and insurmountable indicator of individual worth everyone, while education, health, insurance, welfare and other goods and services tend to become exclusive commodities for sale.
Credit assessment in the EU
In the explanatory statement of the bill, reference is made to those in force in other EU and OECD countries. For example, it is stated that:
– The holding company Schufa Holding AG has been operating in Germany since 1927, whose shareholders include banks and commercial enterprises. Its main function is to provide evaluation reports on the creditworthiness of natural and legal persons, while it is controlled by the competent authority for personal data protection. One of its most important services is the rating of the creditworthiness of the underlying data.
– The KSV1870 group of companies has been operating in Austria since 1870 with the aim of protecting creditors and its members from bankruptcy risks. KSV1870 holds credit information for ~600k Austrian businesses, while providing its customers with online access to credit information for ~93m legal entities and 7m natural persons.
– In France, since 1989, the credit information authority/register FICP (“Fichier national des Incidents de remboursement des Credits aux Particuliers”), with the supervisory authority the Bank of France (Banque de France) and the credit information register FIBEN (“Fichier bancaire des entreprises”).
– Since 2012, a credit register has been operating in Belgium which is similar to the one in France. The Belgian assessment register is under and records data on behalf of the National Bank of Belgium (Nationale Bank Van Belgie).
-In Portugal, the Portuguese central financial assessment register (“Central de Responsabilidades de Cridito”) operated by the Statistics Branch of the Bank of Portugal (Banco de Portugal) has been in operation since 1978.