342 IFC Bulletin No 26

The use of micro-level data from the Bank of Italy’s survey of household income and wealth: a focus on household finance Claudia Biancotti and Giovanni D’Alessio1 1. Micro-level data on household finance The wide access to financial markets currently enjoyed by residents of developed countries is a double-edged sword: compared with their predecessors, contemporary households face both increased opportunities and increased complexity in the field of savings, investments and consumption. On the one hand, virtually everyone can buy and sell stocks, shares of mutual funds, and advanced derivatives; in the long run the availability of a wider range of assets ensures that the individual can achieve a better trade-off between risk and return than with traditional portfolios composed of just bank deposits and treasuries. On the other hand, people need to learn at least something about finance, so that when faced with technically complex decisions about how to secure their pensions, finance the purchase of a house, or set aside something for a rainy day, they are in a position to make reasonably informe