Households' portfolio holdings and their banks' characteristics: is there a link?

Massimiliano Affinito, Ginette Eramo (), Romina Gambacorta () and Marco Langiulli ()
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Ginette Eramo: Bank of Italy
Romina Gambacorta: Bank of Italy
Marco Langiulli: Bank of Italy

No 950, Questioni di Economia e Finanza (Occasional Papers) from Bank of Italy, Economic Research and International Relations Area

Abstract: This paper analyses the relationship between households' portfolio decisions and the characteristics of the banks where they hold their wealth. We use a unique bank-client level dataset covering the period 2004-20, which combines information from Banca d'Italia's Survey on Household Income and Wealth with supervisory reports that banks in Italy are required to submit to Banca d'Italia, matching the two sources by the identity of each household's primary bank. Our results indicate that banks play a crucial role in reducing households' non-participation in financial markets, thereby helping to mitigate the associated welfare costs. Moreover, we find that, even after controlling for all individual household characteristics commonly used in the literature and taking into account potential sources of self-selection and sorting between households and banks, certain bank characteristics remain significantly associated with households' portfolio decisions. These links vary depending on the class of households' asset holdings and the category of banks.

Keywords: household financial investments; bank-customer relationship; bank factors; self-selection; sorting (search for similar items in EconPapers)
JEL-codes: D14 G21 (search for similar items in EconPapers)
Date: 2025-07
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Persistent link: https://EconPapers.repec.org/RePEc:bdi:opques:qef_950_25

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