The Case for a Credit Registry

This chapter seeks to answer this question: What tools does a regulator or policy maker have at his/her disposal to judge whether changes in bank credit are driven by supply-side factors? A methodology that could help policy makers better understand the extent to which supply side factors generate aggregate fluctuations in credit is examined. The methodology is based on the regulator having access to a timely and comprehensive credit registry that contains information on every business loan given out by the banking sector. While such credit registry data are available in many countries around the world, the U.S. does not currently have a comparable system. This chapter discusses the design issues related to building up a credit registry database, outlines the methodology that could be applied to credit registry data to isolate the role of supply-side factors, provides real world examples, and concludes with a discussion of some of the limitations of the methodology.