“…To assess the impacts of corporate taxes on banks' financing choices and asset risk we specify an estimating equation in the spirit of Huizinga and Laeven (). In their setup, as adapted by Gu, de Mooij, and Poghosyan (), the capital structure of a bank in a multinational group depends on the tax rates of all the countries where the group has operations, not only on the domestic tax rate . Specifically, the outcome variable of interest at time t of bank i belonging to group g can be expressed as: In our main specification, the dependent variable, λ i , g , t , is defined as the ratio between total liabilities ( D i , g , t ) and total assets ( A i , g , t ) of bank i at year t .…”