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 tends to maximize the fiscal cost of systemic banking crises, whereas the latter one tends to minimize it. 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 CEPII research center in its series Working Papers with number 2012-05.
Date of creation: Mar 2012
Date of revision:
Fiscal sustainability; 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," 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.
- 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," UniversitÃ© Paris1 PanthÃ©on-Sorbonne (Post-Print and Working Papers) halshs-00755705, HAL.
- Agnes Benassy-Quere & Guillaume Roussellet, 2012. "Fiscal Sustainability in the Presence of Systemic Banks: The Case of EU Countries," CESifo Working Paper Series 3975, CESifo Group Munich.
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
- J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-03-14 (All new papers)
- NEP-BAN-2012-03-14 (Banking)
- NEP-EEC-2012-03-14 (European Economics)
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