ECB Research Bulletin: Euro Area Households Reluctant to Invest in Stocks

27 May 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – Households are hesitant to invest in stocks even after becoming wealthier, according to a Research Bulletin published on Monday by the European Central Bank.

‘We found that households are generally reluctant to invest in stocks, and this remains the case even when they experience a relatively large increase in wealth’, the ECB said.

Excessive barriers to stock market participation, such as a lack of trust or other negative beliefs about stock markets, were preventing households from investing, the ECB said.

‘[I]t may nevertheless be useful to consider building more variation into households’ risk preferences when trying to model the business cycle and, in particular, the transmission of financial shocks’, the ECB said.