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
Financial advice practices may be hiring younger or professional year advisers as a succession option, but they may find they are unable to put up the capital if the adviser looks to retire.
Any changes to product labelling for sustainable funds must be applied consistently across investor channels, including those used by financial advisers, according to RIAA.
Having completed its acquisition of fixed income provider FIIG, AUSIEX believes more can be done to increase direct investment of the assets and can envisage them being made more readily available on separately managed accounts.
After eight consecutive weeks of adviser gains, the latest Padua Wealth Data analysis revealed adviser numbers have dropped as the profession begins to stagnate.
