BANKS, DEBT AND RISK: ASSESSING THE SPILLOVERS OF CORPORATE TAXES.

We find evidence of tax‐driven strategic allocation of debt and asset risk across group entities of European banks. We evaluate the effects that establishing tax neutrality between debt and equity finance has on systemic risk, and show that the degree of coordination in implementing the hypothetical...

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Publicado en:Economic Inquiry Vol. 58; no. 2; pp. 1023 - 1045
Autores principales: Fatica, Serena, Heynderickx, Wouter, Pagano, Andrea
Formato: Artículo
Publicado: Wiley-Blackwell Apr2020
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: BANKS, DEBT AND RISK: ASSESSING THE SPILLOVERS OF CORPORATE TAXES.
      aug:
        au:
          Fatica, Serena
          Heynderickx, Wouter
          Pagano, Andrea
        affil: European Commission, Joint Research Centre (JRC), I‐21027, Ispra, Italy
      su:
        Externalities
        Corporate taxes
        Bank loans
        Tax reform
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        subj:
          Externalities
          Consumer Lending
          Corporate taxes
          Bank loans
          Tax reform
      ab: We find evidence of tax‐driven strategic allocation of debt and asset risk across group entities of European banks. We evaluate the effects that establishing tax neutrality between debt and equity finance has on systemic risk, and show that the degree of coordination in implementing the hypothetical tax reform matters. In particular, a coordinated elimination of the tax advantage of debt would significantly reduce systemic losses in the event of a severe banking crisis. By contrast, uncoordinated tax reforms are not equally beneficial precisely because national tax policies generate spillovers through cross‐border bank activities.
      pubtype: Academic Journal
      doctype: Article
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    language: English
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