Tax banks to discourage systemic-risk creation, not to fund bailouts
| Authors | |
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| Publication date | 07-02-2010 |
| Journal | VOX : Research-based Policy Analysis and Commentary from leading Economists |
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| Abstract |
Obama’s plans for bank taxation took markets, policymakers, and academics by surprise, leaving all parties now debating its merits. This column suggests an alternative. By raising a Pigouvian tax based on banks’ individual contribution to systemic-risk creation, the policy would target the externality caused by funding fragility while raising the cost of opportunistic risk creation in good times. |
| Document type | Article |
| Language | English |
| Published at | http://www.voxeu.org/index.php?q=node/4578 |
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