Government, taxes and banking crises

Hasman, Augusto; López, Ángel L.; ́n, Margarita Samartı

doi:10.1016/j.jbankfin.2011.03.002

Cited by 12 publications

(3 citation statements)

References 17 publications

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“…In the presence of binding capital regulation, adequate capitalisation is also a necessary condition for lending. Moreover, recapitalisations can be more effective than other forms of rescue in many circumstances (Philippon and Schnabl (2009), and Hasman et al (2011). And, empirically, the institution-specific nature of recapitalisations helps identify their effectiveness in a crosssectional analysis, in contrast to generalised deposit insurance and debt guarantee programmes available to all banks in a given jurisdiction (which are controlled for by country dummies below).…”

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confidence: 99%

Rescue packages and bank lending

Brei

Gambacorta

Peter

2013

Journal of Banking & Finance

153

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BIS Working Papers are written by members of the Monetary and Economic Department of the Bank for International Settlements, and from time to time by other economists, and are published by the Bank. The papers are on subjects of topical interest and are technical in character. The views expressed in them are those of their authors and not necessarily the views of the BIS. This publication is available on the BIS website (www.bis.org).

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confidence: 99%

Rescue packages and bank lending

Brei

Gambacorta

Peter

2013

Journal of Banking & Finance

153

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“…For example, [20] have analyzed the effectiveness of different government policies to prevent the emergence of banking crises. They have studied the impact on welfare of using tax-payers money to recapitalize banks, government injection of money into the banking system through credit lines, the creation of a buffer and taxes on financial transactions (the Tobin tax).…”

Section: The Taxation Of Financial Institutionsmentioning

confidence: 99%

Can Tax Policy Contribute to the Crisis?

Szarowská¹

2014

JOEBM

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Abstract-The discussion about causes of financial and economic crisis has focused also on tax consequences and measures. Taxes have not generated the crisis, but some aspects of tax policy may have led to increased risk-taking and indebtedness of banks, households and companies. The aim of the paper is to review main channels through which the tax policy can affect financial markets and financial stability. Attention is focused on taxation of financial institutions, tax reliefs for housing and for capital gains, tax preference for corporate debt financing. The paper examines last development and also current regulation and tax measures realized by national policymakers and European Commission with the goal to avoid future crises. The paper employs standard methods of scientific paper; mainly the method of description and comparative analysis.Index Terms-Crisis, corporate debt financing, reliefs for housing, taxation of financial institutions.

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“…However, there is a dynamic inconsistency in the preferences of the government: while at T=1 it is in the interest of the government to promise full deposit guarantee in order to stop bank runs, in a crisis the welfare-maximizing way to spend government wealth might not consist of transferring it to the depositors of failed banks. In order to state this idea more rigorously, we introduce -similarly with Hasman et al (2011) and Keister (2012) -two uses for government wealth, transfers to consumers and the production of public goods. We assume that if there was no deposit guarantee, and if the depositors were left penniless after bank failures, the welfare-maximizing way to divide government wealth between public goods and transfers to depositors would not consist of paying out the total value of the deposits.…”

Section: Introductionmentioning

confidence: 99%

Why are Bank Runs Sometimes Partial?

Kiema

Jokivuolle

2015

SSRN Journal

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Concern that government may not guarantee bank deposits in a future crisis can cause a bank run. The government may break its guarantee during a severe crisis because of time-inconsistent preferences regarding the use of public resources. However, as deposits are withdrawn during the bank run, the size of the government's liability to guarantee the remaining deposits is gradually reduced, which increases the government's incentive to provide the promised guarantee. This in turn reduces depositors'incentive to withdraw, which may explain why bank runs sometimes remain partial. Our model yields an endogenously determined probability and size of a partial bank run. These depend on a common signal as to the future state of the economy, the cost of liquidity provision to banks, and the government's reputational cost of breaking the deposit guarantee. We apply the model to a multi-country deposit insurance scheme, an idea that has been aired in the context of the European Banking Union.

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Government, taxes and banking crises

Cited by 12 publications

References 17 publications

Rescue packages and bank lending

Rescue packages and bank lending

Can Tax Policy Contribute to the Crisis?

Why are Bank Runs Sometimes Partial?

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