Credit information sharing and the shift in bank lending towards households

The disproportionate increase of bank lending to households relative to businesses is a central trend in the financial sector of many countries. In this paper, we provide evidence that credit information sharing has strongly contributed to this trend. Specifically, using a sample of 25 European countries, we show that credit information sharing is associated with a significant tilt in private bank lending towards household debt. That result is robust to various estimation techniques and control variable sets, as well as to instrumental variable estimations.