Fiscal Sustainability in the Presence of Systemic Banks: The Case of EU Countries
AbstractWe provide a first attempt to include off-balance sheet, implicit insurance to SIFIs into a consistent assessment of fiscal sustainability, for 27 countries of the European Union. We first calculate tax gaps à la Blanchard (1990) and Blanchard et al. (1990). We then introduce two alternative measures of implicit off-balance sheet liabilities related to the risk of a systemic bank crisis. The first one relies of microeconomic data at the bank level. The second one relies on econometric estimations of the probability and the cost of a systemic banking crisis, based on historical data. The former approach provides an upper evaluation of the fiscal cost of systemic banking crises, whereas the latter one provides a lower one. Hence we believe that the combined use of these two methodologies helps to gauge the range of fiscal risk.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3975.
Date of creation: 2012
Date of revision:
fiscal sustainability; tax gap; systemic banking risk; off-balance sheet liabilities;
Other versions of this item:
- Agnès Bénassy-Quéré & Guillaume Roussellet, 2012. "Fiscal Sustainability in the Presence of Systemic Banks : the Case of EU Countries," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00755705, HAL.
- Bénassy-quéré, A. & Roussellet, A., 2013. "Fiscal Sustainability in the Presence of Systemic Banks: the Case of EU Countries," Working papers 428, Banque de France.
- Agnès Bénassy-Quéré & Guillaume Roussellet, 2012. "Fiscal sustainability in the presence of systemic banks: the case of EU countries," Working Papers 2012-05, CEPII research center.
- Agnès Bénassy-Quéré & Guillaume Roussellet, 2012. "Fiscal Sustainability in the Presence of Systemic Banks: the Case of EU Countries," Documents de travail du Centre d'Economie de la Sorbonne 12077, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
- Agnès Bénassy-Quéré & Guillaume Roussellet, 2014. "Fiscal Sustainability in the Presence of Systemic Banks: the Case of EU countries," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) hal-00825256, HAL.
- H12 - Public Economics - - Structure and Scope of Government - - - Crisis Management
- H63 - Public Economics - - National Budget, Deficit, and Debt - - - Debt; Debt Management; Sovereign Debt
- H81 - Public Economics - - Miscellaneous Issues - - - Governmental Loans; Loan Guarantees; Credits; Grants; Bailouts
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