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Taxing Banks Leverage and Syndicated Lending: A Cross-Country Comparison

Author

Listed:
  • Aurore Burietz

    (Catholic University of Lille - IÉSEG School of Management, Lille Campus; LEM CNRS 9221)

  • Steven Ongena

    (NTNU Business School; Centre for Economic Policy Research (CEPR); Swiss Finance Institute; KU Leuven; University of Zurich - Department of Banking and Finance)

  • Matthieu Picault

    (University of Orleans - Laboratoire d'économie d'Orléans)

Abstract

Between 2010 and 2012 and with bank stability as the ultimate target, five European countries implemented a tax levy on banks’ liabilities thereby decreasing the cost of equity relative to the cost of debt. Using a difference-in-differences approach we assess the impact of this tax levy on banks’ participation in the syndicated loan market. We further investigate the impact of the tax levy along bank size and capital structure. We find that banks located in countries where the tax levy was implemented supply more credit. This increase is more significant for larger lenders and banks that are more capital constrained.

Suggested Citation

  • Aurore Burietz & Steven Ongena & Matthieu Picault, 2022. "Taxing Banks Leverage and Syndicated Lending: A Cross-Country Comparison," Swiss Finance Institute Research Paper Series 22-17, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2217
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    Cited by:

    1. is not listed on IDEAS
    2. Emiel Sanders & Rudi Vander Vennet, 2025. "Geopolitical Risk, Cost of Equity, and Bank Lending: Evidence From the Ukrainian War," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 25/1122, Ghent University, Faculty of Economics and Business Administration.
    3. Salha Ben Salem & Sonia Sayari & Moez Labidi, 2024. "Effect of Financial Frictions on Monetary Policy Conduct: A Comparative Analysis of DSGE Models with and without Financial Frictions," Economies, MDPI, vol. 12(3), pages 1-16, March.
    4. Kowalewski, Oskar, 2023. "Organizational mode choices of multinational banks abroad," Global Finance Journal, Elsevier, vol. 57(C).

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    Keywords

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    JEL classification:

    • F34 - International Economics - - International Finance - - - International Lending and Debt Problems
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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