Trust and the Household-Bank Relationship

29 Pages Posted: 15 Oct 2018

See all articles by Miguel Ampudia

Miguel Ampudia

European Central Bank (ECB) - Directorate General Research

Spyros Palligkinis

European Central Bank (ECB)

Date Written: October 12, 2018

Abstract

We examine the role of trust in households’ decisions to hold a bank account and to switch to a new bank. We explore Italian household-level data that contain restricted information on the banks that the households are doing business with, as well as measures of trust in the households’ main bank and the banking sector. We find that households who distrust the banking sector are less likely to hold a bank account. Moreover, account holders are more likely to switch to a new main bank if they do not trust their current one. The estimated relationships persist over and above a range of socioeconomic variables.

Keywords: household finance, banking, trust

JEL Classification: G21, G28, D14

Suggested Citation

Ampudia, Miguel and Palligkinis, Spyros, Trust and the Household-Bank Relationship (October 12, 2018). ECB Working Paper No. 2184, Available at SSRN: https://ssrn.com/abstract=3266282 or http://dx.doi.org/10.2139/ssrn.3266282

Miguel Ampudia (Contact Author)

European Central Bank (ECB) - Directorate General Research ( email )

Kaiserstrasse 29
D-60311 Frankfurt am Main
Germany

Spyros Palligkinis

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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