Tighten credit to help economy – report
Improvements to Australia’s credit reporting regime could boost the economy to the tune of around $1.7 billion and help lower interest rates, according to research conducted by Canberra-based economic consultancy Access Economics for Veda Advantage.
The research, the results of which were released today, found that under a reformed comprehensive credit reporting system, banks and credit institutions would have better access to information that would enable them to better manage risk and therefore make more responsible lending decisions.
It suggested that a comprehensive reporting system could potentially affect borrowers, lenders and the economy as a whole through a range of channels including lower default rates, greater access to better-priced credit, lower interest rates, increased competition and a smoothing of consumption patterns.
The research report said the current credit reporting system denied people the ability to make financial repayments on time, while comprehensive reporting would allow consumers to demonstrate they were a good credit risk.
Commenting on the findings, Veda Advantage chief executive Rory Matthews said Australia was lagging behind the rest of the world when it came to credit reporting.
AUTHOR
Mike Taylor
Recommended for you
The top five licensees are demonstrating a “strong recovery” from losses in the first half of the year, and the gap is narrowing between their respective adviser numbers.
With many advisers preparing to retire or sell up, business advisory firm Business Health believes advisers need to take a proactive approach to informing their clients of succession plans.
Retirement commentators have flagged that almost a third of Australians over 50 are unprepared for the longevity of retirement and are falling behind APAC peers in their preparations and advice engagement.
As private markets continue to garner investor interest, Netwealth’s series of private market reports have revealed how much advisers and wealth managers are allocating, as well as a growing attraction to evergreen funds.
