Institutional Arrangements Of The Protection Of Personal Information In The Credit System

Finance plays an important role in the promotion of market economy development. And the system of credit reporting is an important part of modern financial system.With the deepening of China's marketization, it has become the consensus of the society to accelerate the development of credit reporting system. Since 2004, the building of the databases of corporate and consumer's credit information has achieved a great success. The database almost covers all the active corporate and consumers. But the imperfection of law system is the biggest drawback to restrict the development of credit reporting system. During the development of consumer credit reporting system, the public pay more attention to the personal privacy.The thesis is based on the theory of information asymmetry, the theory of transaction cost and the theory of modern privacy in law. By employing the analysis method of institutional economics, it combines the latest developments of China's consumer credit reporting system and the facts of personal information protection, to research how to create a favorable outside circumstance for consumer credit reporting system, on condition of the efficient protection of personal information.The thesis includes 5 parts.Chapter One introduces the background and meaning of the subject, and the latest study outcomes domestic and overseas.Chapter Two briefs the theory of the credit reporting and the protection of personal information. O.willamson, a comprehensive synthesist of transaction cost theory, accepted H.Simon's analysis to people's economic role, and proposed a hypothesis: economic man are selfish. As long as he profits, he will harm others. O.willamson called it as behavior incentive of opportunism . The presence of opportunism increases the transaction cost. While in an economic society with sound credit system, the opportunism will be sanctioned, and the transaction cost will be cut much. Thereby, it guarantees the transaction scale of the whole society.The asymmetric information is the information that one party has while another party has not. The information can be test with higher cost. Information asymmetry has two outcomes. One is the party with the information behaviors bad. Another is the party without the information has to bear the risk for the one with the information, accordingly facing to the converse selection. Information asymmetry is the main reason to cause default risk. The establishment of credit reporting system will decrease the information asymmetry and reduce the contract risk.As the development of human rights theory and modern privacy theory, many countries establish the privacy protection law in Constitution and Civil Law, or as an independent law. The development of consumer credit reporting system is subject to the changing law. In the drive of the internationalization, the principle of personal information protection converge together among countries. In 1980, OECD adopted Guidelines on the Protection of Privacy and Transborder Flows of Personal Data, bringing forward 8 guidelines to protect personal privacy. EU released processing of personal data and on the free movement of such data, to secure personal data, prohibit free flow of personal data and adopt high safeguard to process, collect and transmit personal data.Chapter Three introduces the construct of consumer credit reporting system and the latest development of personal information protection in China . From 2002 to 2004, the initial stage, the whole scheme of corporate and consumer credit reporting system is drawn. It established the principles and target of the construct of consumer credit reporting system, and then achieved the trial operation of the database of consumer credit information. From 2005 to 2007 is the developing stage. The cover of consumer credit reporting system expanded gradually. The central bank and many regional governments were groping for the establishment of credit reporting system, and started the standardization of the industry of credit reporting, Since 2008, Subprime Mortgage Crisis sweep the world. The public is cognizant of the importance of credit reporting and its supervision. The outside circumstance is improved obviously to advance the development of credit reporting and strengthen the supervision. The consumer credit reporting system construct more quickly.The released legal rules about personal information protection are Government Information Disclosure Bill, Interim Procedures of Supervision on Database of Consumer Credit Information by PBC, and some supervision procedures of credit information so on. One crucial being developed is Credit Information Supervision Act. About the existing law of credit reporting, the legal effect is low, the content is not standard, and the protection of personal right is lack. It dose not match about the protection of personal information and the development of consumer credit reporting system.Chapter Four analyses the successful practices of overseas law of credit reporting and protection of personal information. All in all, there is 3 patterns of consumer credit reporting, market credit reporting in US, public credit reporting in Euro, and association credit reporting in Japan. Different pattern means different law system. The law in US has the principle of ensure the free flow of information, and pays more attention on free flow of information between the protection of consumer right and free flow of information. The law in Euro has the principle of balancing between protecting privacy right and public information, while it emphasizes protection of personal privacy. In Japan, it is industry self discipline to guideline the behaviour of credit reporting and protect personal information.Chapter Five gives policy advices about how to protect personal information in developing of credit reporting system. Main principle is to meet the need of the development of China's consumer credit reporting system firstly, and then to deal with the harmony of the laws. The legal system of personal information protection has 3 parts, the law about protection of information subject's right, the law about behaviours of credit reporting organization, and the law about supervision of credit reporting. They will follow the principle of identical legal theory and equal importance of material rule and procedure norm.