There is much hype about the potential for technological innovation (FinTech) and big data to transform and deliver financial services to consumers. The aim of this paper is to analyse, from the perspective of financial inclusion and consumer protection, the extent to which the current European Union legal framework is prepared to respond to the challenges posed by such innovation in the context of the prospective opportunities and detriment for consumers. Departing from an assessment of the already problematic and jeopardised uses of traditional credit data in the Member States, it concludes that the risks are likely to contrast or outweigh the benefits, but the legal framework does not seem fit for purpose despite the enactment of brand new legislation.
The Article deals with the protection of consumer borrowers and lending investors in peer-to-peer lending within the legal framework provided by EU credit laws. This is the legal framework for EU Member States in the area of loans to consumers. In particular, the article analyses the business model of taking lending decisions on financial technologies (“Fintech”) and big data vis-à-vis the legal obligation of the creditworthiness assessment by lenders. At the same time, it extends the applicability of such a business model to the credit-risk analysis undertaken in the interest of lenders. Ultimately, it questions to what extent EU law caters for peer-to-peer lending, and and to what extent consumers and lenders can find protection. It hints that peer-to-peer lending presents risks for both consumers and lenders, falling short of legal obligations and established practices for their protection.
The paper examines the role of Credit Registries in the context of European consumer credit markets and the current policies of the EU in this area. It attempts to show the institutional challenges relating to some competing rights or interests among consumers and financial institutions, and the need for a strengthened prudential supervision of the financial system as evidenced by the recent crisis whose effects have spread into the global economy. In particular, it shows that there is a conflict between the right to data protection of consumers, the risk-management interests of lenders, and the prudential supervision of the credit system. The ultimate goal, thus, is to present some weaknesses of the current arrangements and to put forward a proposal that is probably controversial but that is intended to stimulate a debate from an alternative policy perspective that is wider than the current one.
This chapter provides an account of the role of personal debt in the modern economy. In particular, it covers the economic dynamics of national personal debt markets and the importance of debt in the current economic model, and analyses the social, demographic and economic characteristics of individuals in debt.Section 2.2 focuses on the size and the growth of the personal debt market in Europe. To this end, data from the ECRI Statistical Package are analysed over the period 1995-2016, both at aggregate level and by country. The focus is not only on the total amount of debt, but also on relative measures, such as the debt to GDP ratio, the debt-toincome ratio and the per-capital amount of debt, in order to draw a picture of the personal debt market in Europe and its evolution over time. Section 2.3 focuses on the factors shaping the evolution of the personal debt market, while Section 2.4 provides an empirical analysis of the characteristics of indebted consumers using data from the Eurosystem's Household Finance and Consumption Survey (HFCS). The analysis is framed within the life-cycle theory, 1 which is the traditional economic setting where the characteristics of individuals holding debt are analysed. The socio-demographic and economic features of consumers who participate in the debt market are separately investigated for mortgage debt and consumer credit, to shed light on existing differences between the two groups of borrowers.
personal debt in europe: size and growth of the marketIn the last twenty years credit to households 2 in Europe had experienced a strong growth until the 2008 crises, a downturn in the following years and an upward trend 1
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