The sustainable development of the EU internal market for retail financial services is based on the rules of ‘suitability’, ‘know your client’, and ‘know your product’. The rules ensure that financial institutions (including banks) offer retail clients only products and services that are adequate to their purposes and preferences, including risk tolerance. Our study, however, concerns households for which the above rules are not valid, since they declare risk aversion and possess risky assets. According to the European Union Markets in Financial Instruments Directive and Regulation (MiFID II and MiFIR), the inconsistent information they provide within survey questions should classify them to more compound suitability assessment procedures. In the study, we use nationally representative data for 16 euro area countries from the second wave of the Eurosystem Household Finance and Consumption Survey. Using logit regression, we identify sets of socio-demographic and socio-economic characteristics conducive to the possession of risky assets by risk-averse households in individual countries. To assess their similarity, we use the hierarchical taxonomic method with Ward’s formula. The results of the study showed that risky assets were primarily possessed by risk-averse households that were characterised by high income, including from self-employment, and reference persons having a university degree and at least 55 years of age. The significance of their other characteristics was mainly shaped at the national level. The clear similarity of sets of the characteristics was confirmed only for a few pairs of countries. The information inconsistency that may result from erroneous self-assessments of being risk-averse was recognised in all countries and most often concerned high-income households with reference persons being males with a university degree. In 11 countries, the reason for this inconsistency could also be the inadequacy of assets held, also among senior households. The results provide insights for practitioners and policy. Identification of households providing inconsistent information to financial institutions, with the recognition of its reasons based on easily verifiable characteristics, may prove helpful in suitability assessments. The results confirming the similarity of household profiles requiring special attention between countries may be useful for entities operating cross-border. Due to the collection of information on risk aversion based on the single question self-classification method, conclusions regarding the restrictions of its use should also be considered relevant. In turn, policy implications may relate to consumer protection, since significant fractions of risk-averse households indeed participate in risky assets. Moreover, in selected countries, the risk-averse senior households were recognised as susceptible to making wrong investment decisions.
The paper investigates the occurrence of three categories of household deposits in 15 euro area countries -guaranteed, high value, and very high value -which, according to the European Banking Authority, differ in terms of their sensitivity to outflows under stress. The analysis is based on householdlevel data and applies a logit model. Its main finding is that the impact of wealth and socio-demographic features of households on their propensity to possess the deposits was opposite regarding guaranteed and unguaranteed deposits. It proves two separate profiles of households who declared deposits in the euro area. For selected member states, the adoption of the single limit within guarantee schemes was assessed as an incentive which may strengthen the deposits' resilience on withdrawals, and thus positively influence the funding stability of credit institutions.
The European Union single liquidity standards - Liquidity Coverage Ratio and Net Stable Funding Ratio – point out household deposits as preferred, stable funding for credit institutions, under normal and stress conditions. The introduction of standards affects not only funding stability of entities, but also their future development opportunities. In countries with populations of low propensity to hold deposits this impact is expected to be negative. The implementation of common standards in a group of diverse countries of the Eurozone seems to be a task of compromised effectiveness. During the last financial and economic crises individual populations were unequally capable to place deposits with credit institutions, leading to significant differences in their average levels per capita in the member states. The aim of this paper is to identify the determinants of the Eurozone’s geographic disparities in the populations’ ability to provide deposits to domestic credit institutions, in selected years: 2006, 2008 and 2012. The indicated periods refer to significantly different macroeconomic background. The results of empirical analysis demonstrate the priority impact of precise variables, referred to the financial market and national economies on the formation of the levels of household deposits per capita in the Euro area. The variables representing household features appear as less important for the considered problem.
W opracowaniu zaprezentowano wyniki badań nas stabilnością depozytów gospodarstw domowych lokowanych w monetarnych instytucjach finansowych 16 krajów tzw. strefy euro. Jego celem jest ocena możliwości regulowania płynności podmiotów za pomocą jednolitych wspólnotowych rozwiązań (norm LCR i NSFR). Przedstawiono różnice w potencjale społeczeństw w zakresie kumulowania depozytów gwarantujących w opinii regulatora stabilność finansowania instytucji w warunkach zarówno normalnych, jak i skrajnych. Badano także przestrzenne zróżnicowanie preferencji gospodarstw domowych dotyczących terminu lokowania środków w zmiennych warunkach gospodarczych i finansowych. Wskazano siłę oddziaływania poszczególnych faz kryzysu finansowego na zmiany w wartościach gromadzonych w MIF depozytów.
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