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Bank levies, the money market and monetary policy operations

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  • Kapuściński, Mariusz

Abstract

The effects of bank levies on loan rates and volumes are well documented. Less is known about its consequences for the money market and monetary policy operations. In this study I focus on the bank levy introduced in Poland and apply the difference-in-differences method to transaction-level data. I find that the introduction of the levy has affected the use of some monetary policy instruments, and money market rates and volumes. This means that it has had important implications for monetary policy implementation and interest rate benchmark reform.

Suggested Citation

  • Kapuściński, Mariusz, 2025. "Bank levies, the money market and monetary policy operations," Finance Research Letters, Elsevier, vol. 83(C).
    • Handle: RePEc:eee:finlet:v:83:y:2025:i:c:s1544612325008050
    DOI: 10.1016/j.frl.2025.107546
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    References listed on IDEAS

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    1. Ulrich Haskamp, 2018. "Spillovers of banking regulation: the effect of the German bank levy on the lending rates of regional banks and their local competitors," International Economics and Economic Policy, Springer, vol. 15(2), pages 449-466, April.
    2. Borsuk, Marcin & Kowalewski, Oskar & Qi, Jianping, 2023. "The dark side of bank taxes," Journal of Banking & Finance, Elsevier, vol. 157(C).
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    5. Aneta Hryckiewicz & Piotr Mielus & Karolina Skorulska & Małgorzata Snarska, 2018. "Does a bank levy increase frictions on the interbank market?," KAE Working Papers 2018-033, Warsaw School of Economics, Collegium of Economic Analysis.
    6. Michael Devereux & Niels Johannesen & John Vella, 2019. "Can Taxes Tame the Banks? Evidence from the European Bank Levies," The Economic Journal, Royal Economic Society, vol. 129(624), pages 3058-3091.
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    9. Chronopoulos, Dimitris K. & Sobiech, Anna L. & Wilson, John O.S., 2019. "The Australian bank levy: Do shareholders pay?," Finance Research Letters, Elsevier, vol. 28(C), pages 412-415.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

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    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • E43 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Interest Rates: Determination, Term Structure, and Effects
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • H26 - Public Economics - - Taxation, Subsidies, and Revenue - - - Tax Evasion and Avoidance
    • H39 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Other

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