Cross-Selling in Bank Household Relationships. Implications for Deposit Pricing, Loan Pricing, and Monetary Policy

Christoph Basten and Ragnar Juelsrud

No 22-65, Swiss Finance Institute Research Paper Series from Swiss Finance Institute

Abstract: Using administrative data on deposits and loans of every Norwegian with every Norwegian bank, we show that an existing deposit account makes a household more likely to hold deposits at the same bank later despite better alternatives and more likely to borrow there. Consistent with this, banks pay higher deposit rates to potential future borrowers. Then they charge existing depositors a premium on loans compared to other households, suggesting that cross-selling is driven by demand rather than supply complementarities. Finally, discounting future cross-selling profits motivates lower deposit spreads in times of lower policy rates and contributes to monetary policy transmission.

Keywords: switching costs; customer lifetime value (clv); cross-selling; relationship banking; supply complementarities; demand complementarities; deposit pricing; deposit channel of monetary policy (search for similar items in EconPapers)
JEL-codes: D14 D43 E52 E58 G12 G21 G51 (search for similar items in EconPapers)
Pages: 43 pages
Date: 2022-08
New Economics Papers: this item is included in nep-ban, nep-cba and nep-mon
References: Add references at CitEc
Citations:

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4204984 (application/pdf)

Related works:
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:chf:rpseri:rp2265

Access Statistics for this paper

More papers in Swiss Finance Institute Research Paper Series from Swiss Finance Institute Contact information at EDIRC.
Bibliographic data for series maintained by Ridima Mittal ().