Credit Network and Data Exchange : An Evaluation of Cooperate Lending

This paper examines the impact of credit data sharing among competitive banks of different sizes in open banking. Analyzing data from three predecessors of Bank of America, we find that information sharing enhances predictive capabilities and increases market lending profit as the network size grows. The bank sharing loans with varying collateral amounts contributes the most to improved prediction. However, competition leads to disparities in benefits, favoring smaller banks while the largest bank experiences losses in borrowers and profits. Effective bargaining for cooperative sharing is thus emphasized. We explore the Nash equilibrium for optimal outcomes in a competitive lending market