IDEAS home Printed from https://ideas.repec.org/a/eee/jbfina/v35y2011i10p2761-2770.html
   My bibliography  Save this article

Government, taxes and banking crises

Author

Listed:
  • Hasman, Augusto
  • López, Ángel L.
  • SamartIín, Margarita

Abstract

This paper analyzes the effectiveness of different government policies to prevent the emergence of banking crises. In particular, we study the impact on welfare of using taxpayers money to recapitalize banks, government injection of money into the banking system through credit lines, the creation of a buffer and taxes on financial transactions (the Tobin tax). We illustrate the trade-off between these policies and derive policy implications.

Suggested Citation

  • Hasman, Augusto & López, Ángel L. & SamartIín, Margarita, 2011. "Government, taxes and banking crises," Journal of Banking & Finance, Elsevier, vol. 35(10), pages 2761-2770, October.
    • Handle: RePEc:eee:jbfina:v:35:y:2011:i:10:p:2761-2770
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0378426611001075
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Yehning Chen & Iftekhar Hasan, 2008. "Why Do Bank Runs Look Like Panic? A New Explanation," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 40(2‐3), pages 535-546, March.
    2. Douglas W. Diamond & Philip H. Dybvig, 2000. "Bank runs, deposit insurance, and liquidity," Quarterly Review, Federal Reserve Bank of Minneapolis, vol. 24(Win), pages 14-23.
    3. Gorton, Gary, 1988. "Banking Panics and Business Cycles," Oxford Economic Papers, Oxford University Press, vol. 40(4), pages 751-781, December.
    4. Mr. Fabian Valencia & Mr. Luc Laeven, 2008. "Systemic Banking Crises: A New Database," IMF Working Papers 2008/224, International Monetary Fund.
    5. Aggarwal, Raj & Goodell, John W., 2009. "Markets and institutions in financial intermediation: National characteristics as determinants," Journal of Banking & Finance, Elsevier, vol. 33(10), pages 1770-1780, October.
    6. Chang, Roberto & Velasco, Andres, 2000. "Financial Fragility and the Exchange Rate Regime," Journal of Economic Theory, Elsevier, vol. 92(1), pages 1-34, May.
    7. Gorton, Gary & Winton, Andrew, 2003. "Financial intermediation," Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 8, pages 431-552, Elsevier.
    8. Chang, Roberto & Velasco, Andres, 2000. "Banks, debt maturity and financial crises," Journal of International Economics, Elsevier, vol. 51(1), pages 169-194, June.
    9. Schuh, Scott & Stavins, Joanna, 2010. "Why are (some) consumers (finally) writing fewer checks? The role of payment characteristics," Journal of Banking & Finance, Elsevier, vol. 34(8), pages 1745-1758, August.
    10. Chen, Yehning & Hasan, Iftekhar, 2006. "The transparency of the banking system and the efficiency of information-based bank runs," Journal of Financial Intermediation, Elsevier, vol. 15(3), pages 307-331, July.
    11. Chang, Roberto, 2007. "Financial crises and political crises," Journal of Monetary Economics, Elsevier, vol. 54(8), pages 2409-2420, November.
    12. Cooper, Russell & Ross, Thomas W., 1998. "Bank runs: Liquidity costs and investment distortions," Journal of Monetary Economics, Elsevier, vol. 41(1), pages 27-38, February.
    13. Hasman, Augusto & Samartín, Margarita & Bommel, Jos Van, 2013. "Financial contagion and depositor monitoring," Journal of Banking & Finance, Elsevier, vol. 37(8), pages 3076-3084.
    14. Itay Goldstein & Ady Pauzner, 2005. "Demand–Deposit Contracts and the Probability of Bank Runs," Journal of Finance, American Finance Association, vol. 60(3), pages 1293-1327, June.
    15. Hasman, Augusto & Samartín, Margarita, 2008. "Information acquisition and financial contagion," Journal of Banking & Finance, Elsevier, vol. 32(10), pages 2136-2147, October.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Cheng, Jin & Dai, Meixing & Dufourt, Frédéric, 2017. "Banking and sovereign debt crises in a monetary union without central bank intervention," Journal of Mathematical Economics, Elsevier, vol. 68(C), pages 142-151.
    2. Brei, Michael & Gambacorta, Leonardo & von Peter, Goetz, 2013. "Rescue packages and bank lending," Journal of Banking & Finance, Elsevier, vol. 37(2), pages 490-505.
    3. Hasanov, Rashad & Bhattacharya, Prasad Sankar, 2019. "Do political factors influence banking crisis?," Economic Modelling, Elsevier, vol. 76(C), pages 305-318.
    4. Dwyer, Gerald P. & Hasman, Augusto & Samartín, Margarita, 2022. "Surety bonds and moral hazard in banking," Journal of Financial Stability, Elsevier, vol. 62(C).
    5. Jin Cheng & Meixing Dai & Frédéric Dufourt, 2016. "Banking Crisis, Moral Hazard and Fiscal Policy Responses," Working Papers of BETA 2016-06, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    6. Kiema, Ilkka & Jokivuolle, Esa, 2015. "Why are bank runs sometimes partial?," Research Discussion Papers 10/2015, Bank of Finland.
    7. García-Palacios, Jaime H. & Hasman, Augusto & Samartín, Margarita, 2014. "Banking crises and government intervention," Journal of Financial Stability, Elsevier, vol. 15(C), pages 32-42.
    8. Kiema, Ilkka & Jokivuolle, Esa, 2015. "Why are bank runs sometimes partial?," Bank of Finland Research Discussion Papers 10/2015, Bank of Finland.
    9. repec:zbw:bofrdp:urn:nbn:fi:bof-201504131153 is not listed on IDEAS
    10. repec:zbw:bofrdp:2015_010 is not listed on IDEAS
    11. Samitas, Aristeidis & Polyzos, Stathis & Siriopoulos, Costas, 2018. "Brexit and financial stability: An agent-based simulation," Economic Modelling, Elsevier, vol. 69(C), pages 181-192.
    12. Szarowska, Irena, 2013. "Can tax policy co-cause the crisis?," MPRA Paper 59780, University Library of Munich, Germany.
    13. Hasman, Augusto & Samartín, Margarita, 2023. "Government intervention, linkages and financial fragility," Economic Modelling, Elsevier, vol. 126(C).
    14. Chang, Chuen-Ping, 2014. "A barrier option framework for rescue package designs and bank default risks," Economic Modelling, Elsevier, vol. 38(C), pages 246-257.
    15. Samitas, Aristeidis & Polyzos, Stathis, 2016. "Freeing Greece from capital controls: Were the restrictions enforced in time?," Research in International Business and Finance, Elsevier, vol. 37(C), pages 196-213.
    16. repec:bof:bofrdp:urn:nbn:fi:bof-201504131153 is not listed on IDEAS

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Augusto Hasman, 2013. "A Critical Review Of Contagion Risk In Banking," Journal of Economic Surveys, Wiley Blackwell, vol. 27(5), pages 978-995, December.
    2. Todd Keister & Vijay Narasiman, 2016. "Expectations vs. Fundamentals- driven Bank Runs: When Should Bailouts be Permitted?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 21, pages 89-104, July.
    3. Moheeput, Ashwin, 2008. "Financial Fragility, Systemic Risks and Informational Spillovers : Modelling Banking Contagion as State-Contingent Change in Cross-Bank Correlation," The Warwick Economics Research Paper Series (TWERPS) 853, University of Warwick, Department of Economics.
    4. Hasman, Augusto & Samartín, Margarita, 2023. "Government intervention, linkages and financial fragility," Economic Modelling, Elsevier, vol. 126(C).
    5. García-Palacios, Jaime H. & Hasman, Augusto & Samartín, Margarita, 2014. "Banking crises and government intervention," Journal of Financial Stability, Elsevier, vol. 15(C), pages 32-42.
    6. Zhu, Haibin, 2005. "Bank runs, welfare and policy implications," Journal of Financial Stability, Elsevier, vol. 1(3), pages 279-307, April.
    7. Moheeput, Ashwin, 2008. "Financial Fragility, Systemic Risks and Informational Spillovers: Modelling Banking Contagion as State-Contingent Change in Cross-Bank Correlation," Economic Research Papers 269851, University of Warwick - Department of Economics.
    8. Assaf Razin & Itay Goldstein, 2012. "Review Of Theories of Financial Crises," 2012 Meeting Papers 214, Society for Economic Dynamics.
    9. Goldstein, Itay & Razin, Assaf, 2015. "Three Branches of Theories of Financial Crises," Foundations and Trends(R) in Finance, now publishers, vol. 10(2), pages 113-180, 30.
    10. repec:zbw:bofrdp:2012_009 is not listed on IDEAS
    11. Ryuichiro Izumi, 2021. "Opacity: Insurance and Fragility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 40, pages 146-169, April.
    12. Kiss, Hubert Janos & Rodriguez-Lara, Ismael & Rosa-García, Alfonso, 2014. "Do social networks prevent or promote bank runs?," Journal of Economic Behavior & Organization, Elsevier, vol. 101(C), pages 87-99.
    13. Gu, Jiadong, 2023. "Optimal stress tests and liquidation cost," Journal of Economic Dynamics and Control, Elsevier, vol. 146(C).
    14. Kristian Blickle & Markus K. Brunnermeier & Stephan Luck, 2022. "Who Can Tell Which Banks Will Fail?," NBER Working Papers 29753, National Bureau of Economic Research, Inc.
    15. Zhiguo He & Wei Xiong, 2012. "Dynamic Debt Runs," The Review of Financial Studies, Society for Financial Studies, vol. 25(6), pages 1799-1843.
    16. Nikitin, Maxim & Smith, R. Todd, 2008. "Information acquisition, coordination, and fundamentals in a financial crisis," Journal of Banking & Finance, Elsevier, vol. 32(6), pages 907-914, June.
    17. Geethanjali Selvaretnam, 2007. "Regulation of Reserves and Interest Rates in a Model of Bank Runs," CDMA Working Paper Series 200714, Centre for Dynamic Macroeconomic Analysis.
    18. Gu, Chao, 2007. "Asymmetric Information and Bank Runs," Working Papers 07-14, Cornell University, Center for Analytic Economics.
    19. Alfonso Rosa García & Hubert Janos Kiss & Ismael Rodríguez Lara, 2009. "Do social networks prevent bank runs?," Working Papers. Serie AD 2009-25, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    20. Matsuoka, Tarishi, 2018. "Banks and liquidity crises in emerging market economies," Journal of Economic Dynamics and Control, Elsevier, vol. 94(C), pages 43-62.
    21. Molyneux, Philip & Upreti, Vineet & Zhou, Tim, 2023. "Depositor market discipline: New evidence from selling failed banks," International Review of Financial Analysis, Elsevier, vol. 89(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbfina:v:35:y:2011:i:10:p:2761-2770. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbf .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.