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

Author

Listed:
  • Massimiliano Affinito

    (Bank of Italy)

  • Ginette Eramo

    (Bank of Italy)

  • Romina Gambacorta

    (Bank of Italy)

  • Marco Langiulli

    (Bank of Italy)

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.

Suggested Citation

  • Massimiliano Affinito & Ginette Eramo & Romina Gambacorta & Marco Langiulli, 2025. "Households' portfolio holdings and their banks' characteristics: is there a link?," Questioni di Economia e Finanza (Occasional Papers) 950, Bank of Italy, Economic Research and International Relations Area.
    • Handle: RePEc:bdi:opques:qef_950_25
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    File URL: https://www.bancaditalia.it/pubblicazioni/qef/2025-0950/QEF_950_25.pdf
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    Keywords

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    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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