Do Regulators Facilitate Wealth Transfer from Households to Financial Institutions?

Time: 13:00-15:00 (UK Time), Wednesday, 7 October 2026
Presenter: Professor Yener Altunbas, Bangor University and the University of Calabria
Co-authors: Daniela Cosmai, "G. d'Annunzio" University of Chieti-Pescara & Gioele Zamparo, University of Udine
Chair: Professor Hong Bo, SOAS University of London
Online venue: Click here to join the seminar on Teams (For any inquiry about how to join the online seminar, please contact Dr. Meng Xie at xm1@soas.ac.uk)

Abstract
Following the 2007–2008 global financial crisis, a sustained low-interest-rate environment (2008–2021) severely compressed net interest margins, fundamentally straining the profitability of European financial institutions. Against this macroeconomic backdrop, regulatory frameworks such as the revised Payment Services Directive (PSD2) were introduced to support retail market competition. However, this study hypothesizes that such regulations inadvertently pressured institutions to restructure their revenue models, precipitating a systemic wealth transfer from individual households to the financial sector via heightened consumer fees. Employing a Difference-in-Differences (DiD) framework on a large-scale panel dataset, we estimate the causal impact of the post-2017 PSD2 regulatory environment on consumer costs across banking and insurance services. Our empirical estimates reveal a highly significant, positive relationship between PSD2 implementation and increased financial burdens on households, robust to a suite of human capital, age, and employment controls. These findings suggest that financial institutions reduced macroeconomic margin compression by leveraging regulatory compliance as a mechanism for systemic fee increases. Ultimately, this study highlights the consequences of financial regulation, raising critical questions regarding the true efficacy of European retail banking policies in safeguarding consumer wealth.

Keywords: Wealth Transfer, Financial Regulation, PSD2, Bank Profitability, Consumer Fees
JEL Classifications: G21, G28, G51 

Speaker

Professor Yener Altunbaş is a Professor in Banking at Bangor Business School. He holds a BSc (Economics) degree from the University of Hacettepe, Ankara and a PhD from the Unversity of Wales, Bangor. He worked first as an analyst with Ziraat and then as an economist in Etibank Banking Inc. in Turkey and as a Research Officer within the Institute of European Finance in the UK. Yener Altunbaş was employed as a Research Fellow with the Business School at South Bank University, London and as a Research Associate at the Centre of Business Research in Cambridge University. He also held a Visiting Researcher post at the European Central Bank (ECB), Bank for International Settlements (BIS) and a guest lectureship at the University of Yildirim Bayazit, Anakara, Turkey. Professor Altunbaş is currently a consultant for ECB, BIS and he is collaborating on research projects with other colleagues at the International Monetary Fund (IMF) and Central Bank of Turkey. Author of many articles on the structure and efficiency of banking markets, his main fields of research interest include: the study of European banks, efficiency, stock market analysis, corporate governance, electoral studies, regional economics and climate change. Recent research has also been concerned with marine biology.