Capital regulation, liquidity requirements and taxation in a dynamic model of banking
[this paper was presented at the joint fall conference 'Basel III and beyond, held by the Deutsche Bundesbank and the Centre for European Economic Research (ZEW) in Eltville from 19 to 20 October 2011]
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Beschreibung
This paper studies the impact of bank regulation and taxation in a dynamic model
where banks are exposed to credit and liquidity risk and can resolve financial distress in
three costly forms: bond issuance, equity issuance or fire sales. We find an inverted U–
shaped relationship between capital requirements and bank lending, efficiency, and welfare,
with their benefits turning into costs beyond a certain threshold. By contrast, liquidity
requirements reduce lending, efficiency and welfare significantly. On taxation, corporate
income taxes generate higher government revenues and entail lower efficiency and welfare
costs than taxes on non-deposit liabilities.
Steht auch als Elektronisches Dokument zur Verfügung (ISBN 978-3-86558-809-8)
Autor*in
Gianni DeNicolò
Themen in »Capital regulation, liquidity requirements and taxation in a dynamic model of banking«
Bankenregulierung Besteuerung Dynamisches Modell