Supply-Side Effects in Households’ Bank Bond Holdings

Giorgia Simion, Ugo Rigoni

Publication: Working/Discussion PaperWorking Paper/Preprint

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Abstract

Using unique panel data on Italian households, we empirically investigate a supply-related channel through which bank’s funding conditions and local market share affect its investors’ bank bond holdings. Controlling for investment and investor attributes, households concentrate more on the bonds issued by their own bank when they are exposed to issuers’ high funding gap, low profitability, or high branches’ market share. When households are less wealthy or unsophisticated, the supply-side channel, expressed by the funding gap, is significantly larger. Our results suggest that banks, through advisors operating at branches, influence households’ asset allocation in the direction that benefits banks most.
Original languageEnglish
Publication statusPublished - 2022

Keywords

  • Bank Bond Holdings
  • Household Finance
  • Financial Intermediation

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