Can taxes tame the banks? evidence from the european bank levies Michael Devereux, Niels Johannsen and John Vella
By: Devereux, Michael Pryce
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Contributor(s): Johannesen, Niels | Vella, John.
Material type: 
ArticlePublisher: 2019Subject(s): BANCOS | PRESTAMOS | IMPUESTOS | RIESGO | CRISIS FINANCIERAOnline resources: Click here to access online
In:
The Economic Journal v. 129, n. 624, November 2019, p. 3058-3091Summary: Following the 2007–2008 financial crisis, a large number of countries introduced levies on bank borrowing intended to reduce risk in the financial sector. This article studies the behavioural responses to bank levies and finds that banks exposed to levies increased their reliance on equity funding, but at the same time increased the risk of their assets; banks shifted risk from the liability side of their balance sheets to the asset side, which mitigated the impact of government intervention. Our analysis also shows that any reduction in total risk was concentrated among banks that pose no or little threat to financial stability.
| Item type | Current location | Home library | Call number | URL | Status | Date due | Barcode |
|---|---|---|---|---|---|---|---|
| Artículos | IEF | IEF | OP 282/2019/624-1 (Browse shelf) | https://academic.oup.com/ej/article/129/624/3058/5552663 | Available | OP 282/2019/624-1 |
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| OP 282/2019/622 The Economic Journal | OP 282/2019/623 The Economic Journal | OP 282/2019/624 The Economic Journal | OP 282/2019/624-1 Can taxes tame the banks? | OP 282/2020/626 The Economic Journal | OP 282/2020/626-1 Taxation of temporary jobs | OP 282/2020/626-2 Lame ducks and local fiscal policy |
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Following the 2007–2008 financial crisis, a large number of countries introduced levies on bank borrowing intended to reduce risk in the financial sector. This article studies the behavioural responses to bank levies and finds that banks exposed to levies increased their reliance on equity funding, but at the same time increased the risk of their assets; banks shifted risk from the liability side of their balance sheets to the asset side, which mitigated the impact of government intervention. Our analysis also shows that any reduction in total risk was concentrated among banks that pose no or little threat to financial stability.
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