Bank taxes and loan monitoring a cautioanry tale by Enzo Dia and David van Hoose
By: Dia, Enzo
.
Contributor(s): Van Hoose, David.
Material type: 
ArticlePublisher: 2018Subject(s): BANCOS | PRESTAMOS | IMPUESTOS | MODELOS ECONOMETRICOSOnline resources: Click here to access online
In:
The Manchester School v. 86, n- 1, January 2018, p. 1-20Summary: This paper analyzes a model in which there is excessive bank lending and in which regulators attempt to correct the problem with a tax. A tax on lending can correct the over-lending problem by reducing the returns from lending. Imposition of the tax has a perverse effect on the composition of lending, however, because it falls more heavily on banks that incur expenses to reduce loan losses. Hence, along the external margin, the share of banks that voluntarily monitor loans decreases. In contrast,
monetary policy tightening can produce the optimal level of lending without generating any distortion of monitoring incentives.
| Item type | Current location | Home library | Call number | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 1285/2018/1-1 (Browse shelf) | Available | OP 1285/2018/1-1 |
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Resumen.
Bibliografía.
This paper analyzes a model in which there is excessive bank lending and in which regulators attempt to correct the problem with a tax. A tax on lending can correct the over-lending problem by reducing the returns from lending. Imposition of the tax has a perverse effect on the composition of lending, however, because it falls more heavily on banks that incur expenses to reduce loan losses. Hence, along the external margin, the share of banks that voluntarily monitor loans decreases. In contrast,
monetary policy tightening can produce the optimal level of lending without generating any distortion of monitoring incentives.
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