The incidence of reserve requirements in Brazil: Do bank stockholders share the burden?Fabia Aparecida de Carvalho () and
Cyntia F. Azevedo
Journal of Applied Economics, 2008, vol. XI, pages 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. Keywords: tax incidence; reserve requirements; event studies (search for similar items in EconPapers) Downloads: (external link) Related works: Access Statistics for this article Journal of Applied Economics is edited by Germán Coloma and Mariana Conte Grand and Jorge M. Streb More articles in Journal of Applied Economics from Universidad del CEMA |
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