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Contribution Details
| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Bank Cross-Selling, Deposit Pricing, and Mortgage Pricing Across Europe |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Date | 2023 |
| Zusammenfassung | The purpose of this thesis is to investigate how banks' opportunities and strategies to crosssell non-deposit products such as mortgages to existing deposit clients affect the pricing of deposits as well as that of possibly cross-sold other personal banking products. The work is motivated by amongst others first findings thereon in Basten and Tuelsrud (2022), who find that Norwegian banks are significantly more likely to sell mortgages to prior depositors, in line with this offer more attractive deposit conditions to households more likely to buy other products from them, and achieve wider mortgage margins from prior depositors. While that paper has worked with annual micro data on the universe of Norwegian household bank relationships, the MA thesis assigned here shall restrict itself to working with data largely at the country level in line with the scope appropriate for an MA thesis. On the other hand, it shall widen the scope beyond the specific context of Norway and investigate data from a wider set of European banking markets. To this objective, the thesis shall for different European countries and years compute the spreads between mortgage rates and govemment bond rates of comparable mafurity, as well as between interbank rates and deposit rates. It shall then relate these two sets of spreads to appropriate measures of market concentration like the Herfindahl-Hirschmann Index and to proxies for cross-selling potential. One possible measure thereof is the home ownership rate, seeing that higher ownership rates are ceteris paribus associated with higher propensities for each new deposit client to also take out a mortgage later. Finally, it shall relate pricing to the policy rate, seeing that typically later cross-selling profits must be discounted at current rates when choosing the optimal deposit spread, as explained in Basten and Juelsrud (2022). |
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