Credit and Integrity-World Credit Organization

1.1 Credit and Integrity

The term credit can be understood as credit in a narrow sense and credit in a broad sense. [Credit in the narrow sense] can be understood as repayment ability and performance ability. For example: When a poor person goes to a bank for a loan, he is rejected by the bank on the grounds of low credit. This credit refers to [credit in the narrow sense]. [Credit in a broad sense] is integrity, which can generally be understood as a code of conduct. This code of conduct is both a legal code and a code of ethics. When a person deceives others, saying that this person does not pay attention to credit, it refers to [credit in a broad sense].

1.1.1 Credit in the narrow sense

Credit in a narrow sense, in layman's terms, is: currency lending, commodity credit sales, and commodity prepayment, which belong to the category of economics. According to different subjects, it can be divided into: national credit, bank credit, commercial credit and consumer credit.

National credit, also known as sovereign credit, in layman's terms, means that the country issues national debts to the society and repays debts.

Bank credit, in layman's terms, means that banks borrow and repay debts from society.

Commercial credit, in layman's terms, refers to the sales and prepayment of goods on credit, the issuance and cashing of commercial bills by the main body of industrial and commercial enterprises in commercial transactions.

Consumer credit, in layman's terms, means that consumers purchase consumer goods by installment payment, or purchase consumer goods with a credit card, and then pay off the account according to the agreement.

For credit in a narrow sense, it can be understood as objective ability, which includes two types:

The first ability is the ability to repay the loan, which can also be extended to the ability to perform the contract.

The second ability is the ability to borrow or buy on credit, which means that the parties have the ability to obtain loans or buy other people's goods on credit. The stronger this ability, the lower his borrowing cost or credit purchase cost. Therefore, sometimes the borrowing cost is used to reversely interpret credit ability. For example: Greece's national bond interest rate rises to 8%, which means that its borrowing costs will increase, its borrowing capacity will decline, and its credit will decline.

The above-mentioned first ability is the basis of the second ability, and the second ability can also be understood as the derived ability of the first ability.

In 2007, the subprime mortgage crisis occurred in the United States (the subprime mortgage crisis, many subprime lenders could not repay the loans on time, and thus produced a chain effect), some experts and scholars also expressed that the crisis was a credit crisis, and some The article pointed out that the US subprime mortgage crisis triggered the global credit crisis. The "credit crisis" referred to here can be understood as "a crisis in the repayment ability of market-related entities", which belongs to credit in a narrow sense.

Currently, most of the research objects of western credit knowledge are credit in a narrow sense. We also call it western traditional credit knowledge. Why does the research object of western credit knowledge focus on credit in a narrow sense? This is determined by its social environment. First, the credit evaluation industry in western countries is developed, and credit information spreads quickly, which makes the cost of dishonesty higher; second, the courts with independent status can stick to the bottom line of justice; third, the modern religious civilization keeps pace with the times. A solid foundation of moral conscience. The social environment built by these three factors makes people actively or passively willing to repay the loan, which makes the analysis of the subject’s willingness to repay no longer important, and people begin to focus on the repayment ability of the social subject. Analytical. Later, based on the above-mentioned objective reality, experts and scholars of western credit knowledge gradually ignored the analysis of repayment willingness in their writings, and gradually began to study credit knowledge on the premise that people have repayment willingness.

For credit in the narrow sense, traditional western credit knowledge has developed to a very advanced stage, and advanced mathematical tools and computer technology have already been widely used to analyze the repayment ability of the subject through the modeling of credit records. This is also the reason why many credit professionals in the West have a background in science.

Credit in the narrow sense belongs to the category of economics, and it is closely related to finance and financial subject knowledge. Therefore, most western universities put the subject of credit knowledge in the economics school (department). This situation has also been emulated in China. Most of the few universities in China that took the lead in setting up credit majors are located in economics schools (departments).

Because the objects of Western credit knowledge research are concentrated in the narrow sense of credit, and the professional talents are also concentrated in the narrow sense of credit, so there are few works on the broad sense of credit.

1.1.2 Credit and integrity in a broad sense

Credit in a broad sense is what we often call "good faith". In other words, good faith is credit in a broad sense.

Integrity is a code of conduct for dealing with various social relationships. It requires people to handle various social relationships in good faith and actively abide by the principles of universal human values. For example: "honesty without deceit", "credibility", "keep credibility", "trust and protection". Integrity can also be understood as a standard of conduct and a value.

Some experts and scholars analyze from the perspective of ethics and think that "integrity" is a moral category. This is undoubtedly correct, but it is not comprehensive. Because the "principle of good faith" has become a basic principle accepted by the laws of almost all countries in the world, it has become a general principle of civil law and other laws, and it is also called the "emperor" clause, and legal acts that violate this principle are of course recognized. It is an invalid legal act or a revocable legal act, so "good faith" is also a legal category.

For example: Article 4 of the "General Principles of Civil Law of the People's Republic of China": Civil activities should follow the principles of voluntariness, fairness, compensation for equal value, and good faith. Corresponding to this principle, the third paragraph of Article 58 of the Law stipulates that the following civil acts are invalid: (3) One party uses fraud, coercion or taking advantage of others' danger to make the other party act against its true intention.

There are similar provisions in the Contract Law and the Company Law.

The above legal clauses illustrate: Integrity is not only a moral norm, but also a legal norm.

The principle of good faith is not only reflected in the field of civil and commercial law, but also in the field of administrative law and criminal law.

Due to the proliferation of untrustworthy behaviors such as counterfeiting and swindling in a certain industry, the media said that the industry had a "credit crisis" or "loss of credit". , the industry's "loss of credit" was revealed, followed by a "credit crunch" in the industry (a period of time when people didn't trust the industry and bought less). Here, "credit crisis" or "credit loss" means "credibility crisis" or "loss of integrity", and "credit" here should be understood as credit in a broad sense. The perpetrator's counterfeit and shoddy behavior and deceitful behavior violated both morality and the law.

It is of great significance to realize that sincerity belongs to legal norms at the same time, it can make people establish such a belief: as long as it is an act of dishonesty, it is not only immoral and should be condemned morally, but most of them are illegal (it Violation of the emperor clause of the law, the principle of good faith), should also be punished by law. Of course, we must also pay attention at the same time that the legal responsibility for untrustworthy behavior is restricted by factors such as the legal environment. Objectively, there are also some bad legal clauses, which directly violate the imperial clause of the principle of good faith. However, as long as more and more people establish the belief and values that honesty is paramount, there will be fewer and fewer laws or acts that violate the principle of honesty.

1.1.3 Credit in the broad sense and credit in the narrow sense

[Credit in a broad sense] can generally be understood as a code of conduct. This code of conduct is both a legal code and a code of ethics.

If [credit in the narrow sense] is understood as repayment ability and performance ability, [broad sense credit] can be understood as repayment willingness and performance willingness, plus: repayment ability and performance ability.

The above content is excerpted from "Introduction to ICE8000 Credit Knowledge" (written by Fang Bangjian, free to use, but please indicate the source)