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Comment by cm277 | Hacker News Reader

As an entrepreneur with businesses in both the US and EU, a federation is probably several steps too far from political will. Instead:

- Let banks operate and merge across borders, especially neobanks/fintechs. European banks are easily 10+ yrs ahead of the US in terms of tech and customer service but they lack scale and capital, especially in the credit side of things.

- Credit, again: we need the equivalent of D&B/Fico for Europe: a single credit bureau that can judge creditworthiness of people and organizations. Even the US has solved this through private companies, why can't Europe? Fellow Euros are shocked when I tell them that a 0-day LLC in the US can get $20k in credit card limits almost immediately.

The rest are easy, especially for web/internet companies. But if we have to raise credit/money based on the rules of the biggest (and slowest!) economies, then the EU is fucked.

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>Let banks operate and merge across borders, especially neobanks/fintechs.

I'm not sure more centralisation of banking is a good idea. Too big to fail and all that. The UK has never really recovered from the banking crisis thanks to its oversized financial activities.

Oh, you mean the declining economy with (checks notes) the largest startup ecosystem in Europe? :-)

The economy where per capita gdp has hardly moved in the last 15 years.

Do we want more GDP? Look where that plan took America. Europe seems to feel it has enough GDP and can pursue additional goals.

If you want to abandon GDP growth then you will need to completely rework our economic and political system. I'm not sure we have come up with a suitable alternative so far.

> Credit, again: we need the equivalent of D&B/Fico for Europe

Hell no, please! If recent years have shown anything, it's that the US shouldn't serve as a blueprint for the EU, or any other aspiring federation.

What stops you spending $20k and declaring bankruptcy for your LLC?

Credit scores are probably illegal in the EU due to the laws against mass surveillance.

You got it, FICO/Equifax/Transunion stop it. The $20k is basically raised on the founders' credit, not the LLCs; richer founders can get a lot more credit right up front. And yes, FICO is probably infeasible in the EU with current laws, that's the point. Fix that first, these businesses are just as critical as actual banks.

Mass surveillance laws don't prevent a bank from doing due diligence on a loan when you ask for a loan, or from suing you if you lied. In Germany it's hard to get a liability shield and there's no compassion for idiots — if you borrowed $20k by lying to the bank about your other loans, your wages will be garnished for life until you pay it back including punitive interest. They could rely on that instead of mass surveillance.

I have a feeling FICO would be more destructive than beneficial for Europe. Look what it's done to America. Borrowing $20k for a startup is not worth that.

The problem isn't that. The problem is that I can't go to a German bank with a non-German tax ID (and without German residency) and get a loan. I am limited to the handful of banks in my country (and Germans to theirs).

FICO doesn't just do aggregation, they also do integration: as an American, running away from credit card debt to a small credit union (a community bank in the States) is as bad as stiffing Citi or JPMorgan.

The American credit market is far more liquid than Europe, partly because it's much larger (one market as opposed to 27) but also because its graded and stratified: as a bank/fund you can choose the risk you want to take and take it accordingly. We're definitely missing that down to individual/SME scale.

Are they forbidden or do they just not want to? There's a service called Raisin which aggregates interest–bearing savings accounts from across the EU from participating banks. Maybe that is now your profitable business idea: build a Raisin for loans.

They're definitely not. You can 100% have a list of late payments on loans by person and business. This already exists in some places.

You can't hoover up every other piece of personal data to build it, but you could definitely get consent to access this information for other loans.

Credit scores are mass surveillance. Essential to the idea is that you already have one in the background. If a bank uses some calculation based on information you provide to decide to give you credit, it's still not a credit score.

> Credit scores are mass surveillance. Essential to the idea is that you already have one in the background. If a bank uses some calculation based on information you provide to decide to give you credit, it's still not a credit score.

US style credit scores are mass surveillance, because they incorporate all of your bank transactions. The actual use-case for credit scores doesn't require that, it merely needs a prediction of whether or not you'll repay a particular loan.

That is totally doable using public data, and one could also offer a service where your bank details get ingested to provide further information (using consent as a basis for the processing). All of this is possible in the EU, under current legislation.

You'd also include public data and area based data based on address, which again is entirely legal.

Source: worked in the insurance version of credit scoring in Europe for a few years.

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