The Incidence of Reserve Requirements in Brazil: Do Bank Stockholders Share the Burden?

Fabia A. de Carvalho and Cyntia F. Azevedo

Journal of Applied Economics, 2008, vol. 11, issue 1, 61-90

Abstract: There is consensus in the economic literature that reserve requirements are a tax levied upon financial intermediation, yet the incidence of the tax remains controversial. In this paper, we test whether changes in reserve requirements in Brazil impact the stock returns of the Brazilian financial system distinctly from the rest of the economy. We show that Brazilian bank stock returns may have been affected by changes in reserve requirements on both time deposits and transaction accounts, which implies that the tax burden of required reserves has not been fully passed through to banks' borrowers or clients. Stock returns of non-financial firms may also have been affected by changes in reserve requirements, suggesting that in some cases reserve requirements on time deposits and transaction accounts served as a non-neutral instrument of monetary or fiscal policy in Brazil.

Date: 2008
References: Add references at CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://hdl.handle.net/10.1080/15140326.2008.12040499 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:taf:recsxx:v:11:y:2008:i:1:p:61-90

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/recs20

DOI: 10.1080/15140326.2008.12040499

Access Statistics for this article

Journal of Applied Economics is currently edited by Jorge M. Streb

More articles in Journal of Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().