Financial Development and Household Portfolios: Evidence from Spain, the U.K. and the U.S.

Posted: 21 Apr 2007 Last revised: 14 Mar 2011

See all articles by Angelos A. Antzoulatos

Angelos A. Antzoulatos

University of Piraeus - Department of Banking and Financial Management

Chris Tsoumas

Hellenic Open University

Date Written: March 19, 2009

Abstract

We examine the impact of financial development on the composition of household portfolios in Spain, the U.K. and the U.S., three countries whose financial systems underwent profound changes over the past two decades and for which relevant data exist for sufficiently long time periods. We find a 'division of labour' between the indices measuring financial development and asset returns, the first affecting mainly the long-run dynamics of household portfolios and the second the short-run dynamics; both, however, in an economically reasonable way. Among the notable results pertaining to long-run dynamics, more competitive financial intermediaries are associated with a higher share of currency and deposits and a lower share of equity. For the short-run dynamics, the most important driver is stock market returns.

Keywords: Financial Development Indices, Financial Intermediaries, Household Portfolios

JEL Classification: G11, G20

Suggested Citation

Antzoulatos, Angelos A. and Tsoumas, Chris, Financial Development and Household Portfolios: Evidence from Spain, the U.K. and the U.S. (March 19, 2009). Journal of International Money and Finance, Vol. 29, No. 2, pp. 300-314, Available at SSRN: https://ssrn.com/abstract=981724

Angelos A. Antzoulatos

University of Piraeus - Department of Banking and Financial Management ( email )

80 Karaoli & Dimitriou Str.
18534 Piraeus, 185 34 -GR
Greece

Chris Tsoumas (Contact Author)

Hellenic Open University ( email )

Parodos Aristotelous 18
26335 Patra
Greece

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