Template-type: ReDIF-Paper 1.0
Author-Name: Elena Carletti
Author-Name: Filippo De Marco
Author-Name: Vasso Ioannidou
Author-Name: Enrico Sette
Title:Banks as Patient Lenders: Evidence from a Tax Reform
Abstract:We study how a greater reliance on deposits affects bank lending policies. For identification, we exploit a tax reform in Italy that induced households to substitute bank bonds with deposits. We show that the reform led to larger increases (decreases) in term deposits (bonds) in areas where households held more bonds before the reform. We then find that banks with larger increases in deposits did not change their overall credit supply, but increased credit-lines and the maturity of term-loans. These results are consistent with key theories on the role of deposits as a discipline device and of banks as liquidity providers.
Classification-JEL:G21, G28, G01
Keywords:Banks, deposits, maturity, risk-taking, government guarantee
Length: 53
Number: 19110
Creation-Date: 2019
File-URL: https://repec.unibocconi.it/baffic/baf/papers/cbafwp19110.pdf
File-Format: application/pdf
File-Size: 1360
Handle: RePEc:baf:cbafwp:cbafwp19110