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Banks' equity stakes and lending: evidence from a tax reform
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| Authors and Corporations: | , |
|---|---|
| Other Authors: | Foos, Daniel 1981- [Author] |
| Type of Resource: | E-Book |
| Language: | English |
| published: |
Frankfurt am Main
Deutsche Bundesbank
[2018]
|
| Series: |
Deutsche Bundesbank: Discussion paper ; no 2018, 06
|
| Source: | Verbunddaten SWB Lizenzfreie Online-Ressourcen |
| ISBN: |
9783957294357
3957294355 |
| Summary: | Several papers find a positive association between a bank's equity stake in a borrowing firm and lending to that firm. While such a positive cross-sectional correlation may be due to equity stakes benefiting lending, it may also be driven by endogeneity. To distinguish the two, we study a German tax reform that permitted banks to sell their equity stakes tax-free. After the reform, many banks sold their equity stakes, but did not reduce lending to the firms. Thus, our findings question whether prior evidence can be interpreted causally and suggest that banks’ equity stakes may be less important for lending than previously thought. |
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| Physical Description: | 1 Online-Ressource (circa 44 Seiten); Illustrationen |
| ISBN: |
9783957294357
3957294355 |