EconPapers    
Economics at your fingertips  
 

To stay or go? Consumer bank switching behaviour after government interventions

Maaike Diepstraten and Carin Cruijsen

Journal of Banking & Finance, 2019, vol. 106, issue C, 16-33

Abstract: We analyse whether and how individual savings and current account holders respond to government interventions, due to the financial crisis, at banks. We employ a difference-in-difference analysis and distinguish between a nationalisation and a capital injection. We show that current account holders of the nationalised bank are more likely to switch away shortly after the bail-out. Second, we find heterogeneity in consumer responses to government interventions, depending on the type of intervention and banking product. Consumers who trust the government are less likely to switch their current account from a nationalised bank. Furthermore, risk averse current account holders at a bank that received a capital injection are more likely to switch, which suggests the presence of a wake-up call effect. Finally, we report that financial literate current account holders are more likely to switch away after a nationalisation, and financial literate savings account holders are more likely to switch away from the recapitalised bank. The latter finding also indicates that risk awareness increased.

Keywords: Consumer bank switching; Bail-outs; Trust in the government; Risk aversion; Financial literacy (search for similar items in EconPapers)
JEL-codes: D14 G21 G28 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0378426619301281
Full text for ScienceDirect subscribers only

Related works:
Working Paper: To stay or go? Consumer bank switching behaviour after government interventions (2017) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:106:y:2019:i:c:p:16-33

DOI: 10.1016/j.jbankfin.2019.05.023

Access Statistics for this article

Journal of Banking & Finance is currently edited by Ike Mathur

More articles in Journal of Banking & Finance from Elsevier
Bibliographic data for series maintained by Haili He ().

 
Page updated 2020-06-18
Handle: RePEc:eee:jbfina:v:106:y:2019:i:c:p:16-33