Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 17, 2023 erstellt
Beschreibung:
We test opposing hypotheses regarding the previously unexplored effects of taxes on bank liquidity creation using the exogenous shock of the Tokyo bank tax. We find reduced liquidity creation, consistent with empirical domination of the Risk Absorption Hypothesis over the Financial Fragility-Crowding Out Hypothesis. Banks shift from illiquid toward liquid assets (including from long-term loans to short-term government securities), with potentially unfavorable real economic effects. The Tokyo bank tax also appears to harm banks’ abilities to manage and absorb risks. Our analysis highlights the importance of considering the potential for unintended consequences of bank tax policies through changing liquidity creation