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Banking on trust: institutional trust and the geography of financial exclusion in Central and Eastern Europe

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  • Rodríguez-Pose, Andrés
  • Sandu, Alexandra

Abstract

In this paper we investigate what determines access to banking in Central and Eastern Europe (CEE). The research uses different waves of the OeNB Euro Survey – covering over 91,000 individuals during the period 2012–2020 – and pooled and multilevel logit models to analyse how the interplay of trust in institutions, socio-economic attributes and geographic contexts shapes access to bank accounts, savings deposits and loans across 10 CEE countries. The findings reveal significant disparities in banking inclusion across products: while institutional trust enhances access to current accounts and savings deposits, its impact on loans is weaker. Socio-economic factors and geographical contexts, particularly at the local NUTS3 level, also matter enormously for financial inclusion. National and local economic conditions are key in shaping variations in financial inclusion/exclusion across CEE.

Suggested Citation

  • Rodríguez-Pose, Andrés & Sandu, Alexandra, 2025. "Banking on trust: institutional trust and the geography of financial exclusion in Central and Eastern Europe," LSE Research Online Documents on Economics 128413, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:128413
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    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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