Banks Information Policies, Financial Literacy and Household Wealth

Quaderni DSE Working Paper No. 852

43 Pages Posted: 6 Nov 2012

See all articles by Margherita Fort

Margherita Fort

University of Bologna; Ifo Institute, CESifo (Center for Economic Studies and Ifo Institute), Ifo Institute; IZA

Francesco Manaresi

Bank of Italy

Serena Trucchi

University of Bologna; Center for Research on Pensions and Welfare Policies (CeRP)

Date Written: November 5, 2012

Abstract

We investigate the causal effect of financial literacy on financial assets, exploiting banks information policies for identification. In Italy, banks who belong to the PattiChiari consortium have implemented policies aimed at increasing transparency and procedural simplification. These policies may affect individuals' financial literacy without involving any direct cost for clients in terms of time, effort or resources, as we show in the paper. We exploit confidential information on whether individuals have their main bank account in one bank in the PattiChiari consortium to instrument their financial literacy level. We show that these policies have a positive and significant effect on both knowledge of financial instruments and household financial assets. Our results suggest that banks information policies have the potential to be an effective tool to increase individuals' financial literacy and that the relationship between financial literacy and wealth is largely underestimated by standard regression models.

Keywords: Financial Literacy, Wealth, Instrumental Variables

JEL Classification: D14, G11

Suggested Citation

Fort, Margherita and Manaresi, Francesco and Trucchi, Serena, Banks Information Policies, Financial Literacy and Household Wealth (November 5, 2012). Quaderni DSE Working Paper No. 852. Available at SSRN: https://ssrn.com/abstract=2171259 or http://dx.doi.org/10.2139/ssrn.2171259

Margherita Fort (Contact Author)

University of Bologna ( email )

Piazza Scaravilli 2
Bologna, 40100
Italy

Ifo Institute, CESifo (Center for Economic Studies and Ifo Institute), Ifo Institute ( email )

Poschinger Str. 5
Munich
Germany

IZA ( email )

Francesco Manaresi

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Serena Trucchi

University of Bologna ( email )

Piazza Scaravilli 2
Bologna, 40100
Italy

Center for Research on Pensions and Welfare Policies (CeRP) ( email )

Via Real Collegio, 30
Moncalieri, Turin 10024
Italy

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
28
Abstract Views
386
PlumX Metrics