Fiscal Sustainability in the Presence of Systemic Banks: the Case of EU countries
Roussellet, Guillaume; Bénassy-Quéré, Agnès (2014), Fiscal Sustainability in the Presence of Systemic Banks: the Case of EU countries, International Tax and Public Finance, 21, 3, p. 436-467. http://dx.doi.org/10.1007/s10797-013-9273-0
TypeArticle accepté pour publication ou publié
External document linkhttp://halshs.archives-ouvertes.fr/halshs-00755705
Journal nameInternational Tax and Public Finance
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Abstract (EN)We provide a first attempt to include off-balance sheet, implicit insurance to SIFIs into a consistent assessment of fiscal sustainability, for 27 countries of the European Union. We first calculate tax gaps à la Blanchard (1990) and Blanchard et al. (1990). We then introduce two alternative measures of implicit off-balance sheet liabilities related to the risk of a systemic bank crisis. The first one relies on microeconomic data at the bank level. The second one is based on econometric estimations of the probability and the cost of a systemic banking crisis. The former approach provides an upper evaluation of the fiscal cost of systemic banking crises, whereas the latter one provides a lower one. Hence we believe that the combined use of these two methodologies helps to gauge the range of fiscal risk.
Subjects / Keywordsoff-balance sheet liabilities; systemic banking risk; tax gap; fiscal sustainability
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Andrade, Philippe; Carré, Martine; Bénassy-Quéré, Agnès (2012) Article accepté pour publication ou publié