Financial Activities Taxes, Bank Levies and Systemic Risk

Giusi Cannas, Jessica Cariboni, Massimo Marchesi, Gaëtan Nicodème, Marco Petracco Giudici and Stefano Zedda
Additional contact information
Massimo Marchesi: European Commission
Stefano Zedda: Joint Research Centre of the European Commission

No 43, Taxation Papers from Directorate General Taxation and Customs Union, European Commission

Abstract: The question of additional taxes on banking institutions has recently been debated.At the same time, financial regulation in the banking sector is undergoing many changes aimed at strengthening financial stability. This paper uses SYMBOL, a micro-simulation model of the banking system, to estimate contributions to systemic risk of individual banks under various future regulatory scenarios and compares them to their potential tax liabilities under alternative designs of Financial Activity Taxes and Bank Levies. The results show that when contagion is not avoided, all taxes perform about the same way. However, when contagion is avoided, bank levies outperform FATs.

Keywords: Taxation; Banks; Financial Activity Tax; Bank levy; Systemic Risk; Regulation (search for similar items in EconPapers)
JEL-codes: F23 G32 H25 R38 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2014-04
New Economics Papers: this item is included in nep-ban, nep-cba, nep-cmp, nep-pbe and nep-reg
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Citations: View citations in EconPapers (8)

Forthcoming in Taxation and Regulation of the Financial Sector, 2014, R. de Mooij and G. Nicodeme (eds), MIT Press

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