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' nancial literacy and that the relationship between financial literacy and wealth is largely underestimated by standard regression models.

Margherita Fort, Francesco Manaresi, Serena Trucchi (2012). Banks Information Policies, Financial Literacy and Household Wealth. Bologna : Università degli studi di Bologna - Dipartimento di Scienze Economiche.

Banks Information Policies, Financial Literacy and Household Wealth

FORT, MARGHERITA;MANARESI, FRANCESCO;TRUCCHI, SERENA
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' nancial literacy and that the relationship between financial literacy and wealth is largely underestimated by standard regression models.
2012
43
Margherita Fort, Francesco Manaresi, Serena Trucchi (2012). Banks Information Policies, Financial Literacy and Household Wealth. Bologna : Università degli studi di Bologna - Dipartimento di Scienze Economiche.
Margherita Fort; Francesco Manaresi; Serena Trucchi
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11585/153049
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