Financial Distress and Information Sharing: Evidences from the Italian Credit Register

Abstract

Credit risk exposure evaluation is driven by the quality of the information available on the debtors and customers with multiple lending exposures, which could be evaluated differently by different lenders. The existence of an information asymmetry among lenders can be mitigated using private information sharing instruments, such as the credit registers. The paper analyses the effect of information disclosure through credit registers and evaluates the impact of revising the amount of credit offered to customers served also by other lenders. The results show that the information available for each lender is different and after the disclosure of past due or a default status declared by a financial intermediary, all the other lenders react to the new information available.