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The GPs address the fundamental problem of information asymmetry between lenders and borrowers, which may lead to adverse selection, credit rationing and moral hazard. The principles and related roles define the minimum elements underlying a sound, efficient and effective credit reporting system supporting credit portfolio management and financial supervision. The GPs focus on: i) data accuracy, timeliness and sufficiency; iii) data security and efficiency; iii) service providers governance and risk management; iv) legal and regulatory environment; and v) cross-border data flows. The GPs are intended for policy makers, regulators, financial supervisors, data providers, credit reporting service providers, individuals and businesses and includes roles for these key players to facilitate implementation. The GPs are deliberately expressed in a general way to ensure that they can be useful in all countries and flexible to cover different country circumstances. The GPs are not intended as a blue print for the design or operation of any specific system.
International Endorsement: The World Bank has led a Task Force including representatives from the Bank for International Settlement, the International Monetary Fund, some regional financial institutions (Arab Monetary Fund, CEMLA, European Bank for Reconstruction and Development, Inter-American Development Bank), several central banks and banking supervisors (Banco Central do Brasil, Banca D’Italia, Bank of Spain, Central Bank of the Republic of Turkey, Deutsche Bundesbank, Federal Reserve Bank of New York, People’s Bank of China, Reserve Bank of India), other relevant national authorities, the European Commission, some industry associations; and data/consumer protection agencies. The General Principles followed an open consultation process in 2011 before its final publication.
International Application: The GPs are being used in the context of the Financial Sector Assessment Program (FSAP) and in the Insolvency and Creditor Rights (ICR) standards as a reference (no formal assessment). The GPs are also used in credit reporting diagnostic exercises that the World Bank conducts. Also some institutions are using the GPs for self-assessments.
Assessment Methodology
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In September 2011, the ICCR published the report General Principles for Credit Reporting (GPCR) which establishes an internationally agreed framework for credit reporting systems including credit registries, credit bureaus and commercial credit reporting companies. The World Bank led the same Task Force that developed the GPs for the elaboration of the assessment methodology. This report, published in march 2013, contains the ICCR Assessment Methodology for the General Principles for Credit Reporting and Recommendations for Oversight referenced in the GPCR. This assessment intends to provide guidance to assessors for evaluating observance of the five (5) principles, six (6) roles for participants and five (5) recommendations for Oversight set forth in the GPCR.