We show theoretically how the anticipated cross-selling of loans incentivizes banks to offer lower deposit spreads to … attract and retain depositors, more when policy rates are lower and future cross-selling is more valuable. Utilizing … demand respond to policy rate cuts with greater deposit spread reductions for clients with higher cross-selling potential …

existing depositors a premium on loans compared to other households, suggesting that cross-selling is driven by demand rather … than supply complementarities. Finally, discounting future cross-selling profits motivates lower deposit spreads in times …