While a large literature has examined how bank credit shocks affect firms or households, it has not accounted for the fact that such shocks may simultaneously impact both. In this paper, we overcome this limitation and disentangle the real impact of a credit market disruption into the effect of firm-side credit shocks, individual-side credit shocks, and their interaction. To this end, we construct a novel dataset linking Norwegian employees to their employers and their respective bank relationships. We show that individuals’ labor income and consumption decline by 1–2% when only they or only their employer face a credit shock, compared to the benchmark where neither do. However, when individuals and their employer simultaneously face a credit shock, labor income and consumption decline by nearly 6%, revealing a strong amplification effect. This amplification arises because personal credit constraints hinder individuals’ consumption smoothing and job search when confronted with wage cuts or layoffs triggered by their employer’s credit constraints. Our findings suggest that this mechanism also shapes the aggregate transmission of credit shocks.

Reverse Mortgages (RMs) enable eligible older homeowners to access home equity without moving out or repaying before maturity. We incorporate RMs into a quantitative equilibrium life-cycle model to assess their effects on household decisions, mortgage markets, and housing prices. We show that RMs simultaneously increase housing prices and mortgage rates while reducing house price volatility. Compared to households without RMs, those with access to RMs experience lower consumption growth volatility and reduced refinancing needs. Households in the lowest-income group enjoy the largest consumption-smoothing benefits and welfare gains, while other groups experience moderate gains. We decompose RMs’ direct effects from their price feedback effects, which can have offsetting implications for consumption growth volatility and welfare. Moreover, access to RMs is welfare-equivalent to a permanent increase in retirement income, implying that households would require higher Social Security benefits to attain the same welfare level in the absence of RMs. Overall, RMs enhance social welfare through improved private risk sharing and consumption smoothing.

We study how cross-selling of banks affects household credit using administrative register data on bank–household relationships in Denmark. Our identification strategy exploits plausibly exogenous changes in cross-selling resulting from bank mergers, comparing acquiring-bank borrowers who have pre-merger relationships with the target bank to those who do not. Borrowers whose cross-selling relationships strengthen receive loans that are 22\% larger and face interest rates about 60 basis points lower after the merger. The effect is stronger in less-competitive local banking markets. Cross-selling also enables treated borrowers to reallocate balances from deposits toward securities following the merger. In addition, Treated borrowers are less likely to exit the acquiring bank in the years following the merger, indicating that cross-selling increases customer retention. Overall, our findings suggest that cross-selling has an economically significant effect on household credit as well as the persistence and profitability of bank--customer relationships.