Finance Seminar Kaspar Meisner Nielsen
The paper studies how banking relationships passed down within families shape access to credit. Using Danish administrative data, the authors show that most children bank with their parents' institution, and that this typically means reaching a first mortgage, loan, or brokerage account earlier than peers who don't. For causal identification, they use bank mergers that disrupt parent-child banking ties and wealth shocks following a grandparent's death. In both settings, children sharing their parents' bank receive larger loans at lower interest rates.
The findings suggest that banks act as a conduit for intergenerational privilege, helping advantage persist across generations through preferential credit access rather than income or savings alone.
Takeaway: Banking relationships, not just wealth, get passed down across generations, with real consequences for credit access.