New Economics Papers
on Banking
Issue of 2006‒07‒15
five papers chosen by
Roberto J. Santillán–Salgado, EGADE-ITESM

  1. Entry of Foreign Banks and their Impact on Host Countries By Maria Lehner; Monika Schnitzer
  2. Bank Profitability and Taxation By Ugo Albertazzi
  3. Household financial assets in the process of development By Honohan, Patrick
  4. The Rates and Revenue of Bank Transaction Taxes By Jorge Baca-Campodónico; Luiz de Mello; Andrei Kirilenko
  5. The cyclicality of interest rate spreads in Austria: Evidence for a financial decelerator? By Johann Burgstaller

  1. By: Maria Lehner (University of Munich, Akademiestr. 1/III, 80799 Munich, Germany. Tel: +49 89 2180 2766; Monika Schnitzer (University of Munich, Akademiestr. 1/III, 80799 Munich, Germany and CEPR. Tel: +49 89 2180 2217
    Abstract: Foreign bank entry is frequently associated with spillover effects for local banks and increasing competition in the local banking market. We study the impact of these effects on host countries. In particular, we ask how these effects interact and how they depend on the competitive environment of the host banking market. An increasing number of banks is more likely to have positive welfare effects the more competitive the market environment, whereas spillovers are less likely to have positive welfare effects the stronger competition. Hence, competitive effects seem to reinforce each other, while spillovers and competition tend to weaken each other.
    Keywords: foreign bank entry, multinational bank, competition in banking, spillover effects
    JEL: F37 G21 L13 O16
    Date: 2006–06
  2. By: Ugo Albertazzi (Research Department Banca d'Italia)
    Keywords: Tax-Shifting, Corporate Income Tax, Bank Profitability
    JEL: C53 G20 G21
    Date: 2006–07–04
  3. By: Honohan, Patrick
    Abstract: Systematic information on household financial asset holdings in developing countries is very sparse. The author reviews some available data and current policy debates. Although financial asset holdings by households are highly concentrated, deeper financial systems are correlated with improved income distribution. For low-income countries, the relevant question for poor households is not how much financial assets they have, but whether they have any access to financial products at all. Building on and synthesizing disparate data collection efforts by others, the author produces new estimates of access percentages for over 150 countries. Across countries access is negatively correlated with poverty rates, but the correlation is not a robust one: thus the supposed anti-poverty potential of financial access remains econometrically elusive. Despite policy focus on the value of credit instruments, it is deposit products that tend to be the first to be used as prosperity increases, before more sophisticated savings products and borrowing.
    Keywords: Economic Theory & Research,Banks & Banking Reform,Investment and Investment Climate,Financial Intermediation,Settlement of Investment Disputes
    Date: 2006–07–01
  4. By: Jorge Baca-Campodónico; Luiz de Mello; Andrei Kirilenko
    Abstract: This paper provides cross-country empirical evidence on the productivity of bank transaction taxes (BTTs). Our data set comprises six Latin American countries that have levied BTTs since the late 1980s: Argentina, Brazil, Colombia, Ecuador, Peru and Venezuela. We find that, for a given tax rate, revenue declines over time. Therefore, in order to meet a fixed revenue target in real terms, the tax rate needs to be raised repeatedly. However, we also find that successive increases in the tax rate erode the tax base by more than they raise revenue yield and that the higher the increase in the tax rate, the more and faster the tax base is eroded. We conclude that BTTs do not provide a reliable source of revenue, especially over the medium term. <BR>Ce document fournit une étude empirique de comparaison internationale sur la productivité des impôts sur les transactions bancaires (ITB). Notre base de données correspond à 6 pays d’Amérique latine qui ont un impôt sur les transactions bancaires: Argentine, Brésil, Colombie, Équateur, Pérou et Venezuela. Nous trouvons que le revenu diminue au fil du temps pour un taux d’imposition donné. Pour cette raison, le taux d’imposition doit être augmenté régulièrement en vue d’atteindre une cible de revenu en terme réel. Cependant, nous voyons que les augmentations successives des taux d’imposition réduisent l’assiette d’imposition plus que le rendement obtenu, et plus grande est la hausse du taux d’imposition, plus rapide est l’érosion de l’assiette d’imposition. Nous concluons que l’imposition des transactions bancaires ne fournit pas une source de revenu fiable, particulièrement sur le moyen terme.
    Keywords: bank transaction tax, bank debit tax , tax productivity, impôts sur les transactions bancaires, impôt sur les retraits bancaires, productivité des impôts
    JEL: G28 G29 H21 H22
    Date: 2006–06–30
  5. By: Johann Burgstaller (Department of Economics, Johannes Kepler University Linz, Austria)
    Abstract: This study explores an important aspect of how the Austrian banking sector contributes to the propagation of aggregate shocks. Time series data for the 1995-2003 period are applied to examine the cyclical variations in interest rate spreads. Differentials between interest rates on loans and savings are not found to shrink in economic upturns, so there is no financial mechanism emanating from bank markups that would entail an amplification of macroeconomic fluctuations. But also the evidence for Austrian banks dampening the business cycle (a financial de-celerator) is not striking as the increases of interest rate spreads after shocks in the growth rate of real GDP are practically small.
    Keywords: Interest rate spreads; business cycles; financial accelerator; impulse response analysis
    JEL: E32 G21
    Date: 2006–07

This issue is ©2006 by Roberto J. Santillán–Salgado. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
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