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    Rights statement: This is the author’s version of a work that was accepted for publication in Journal of Financial Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Financial Economics, 141, 1, 2021 DOI: 10.1016/j.jfineco.2020.07.021

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    Available under license: CC BY-NC-ND: Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License

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Banks as Patient Lenders: Evidence from a Tax Reform

Research output: Contribution to Journal/Magazine › Journal article › peer-review

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Banks as Patient Lenders: Evidence from a Tax Reform. / Carletti, Elena; De Marco, Filippo; Ioannidou, Vasso et al.
In: Journal of Financial Economics, Vol. 141, No. 1, 31.07.2021, p. 6-26.

Research output: Contribution to Journal/Magazine › Journal article › peer-review

Harvard

Carletti, E, De Marco, F, Ioannidou, V & Sette, E 2021, 'Banks as Patient Lenders: Evidence from a Tax Reform', Journal of Financial Economics, vol. 141, no. 1, pp. 6-26. https://doi.org/10.1016/j.jfineco.2020.07.021

APA

Carletti, E., De Marco, F., Ioannidou, V., & Sette, E. (2021). Banks as Patient Lenders: Evidence from a Tax Reform. Journal of Financial Economics, 141(1), 6-26. https://doi.org/10.1016/j.jfineco.2020.07.021

Vancouver

Carletti E, De Marco F, Ioannidou V, Sette E. Banks as Patient Lenders: Evidence from a Tax Reform. Journal of Financial Economics. 2021 Jul 31;141(1):6-26. Epub 2021 Mar 4. doi: 10.1016/j.jfineco.2020.07.021

Author

Carletti, Elena ; De Marco, Filippo ; Ioannidou, Vasso et al. / Banks as Patient Lenders : Evidence from a Tax Reform. In: Journal of Financial Economics. 2021 ; Vol. 141, No. 1. pp. 6-26.

Bibtex

@article{429e5c6b1e954603a9d097ca9d56488a,
title = "Banks as Patient Lenders: Evidence from a Tax Reform",
abstract = "We provide new evidence on how deposit funding affects bank lending. For identification, we exploit the 2011 reform of the investment income tax in Italy that induced households to substitute bank bonds with deposits. We find that banks with larger increases in deposits expand the supply of credit lines and long-term credit to low-risk firms. Additional evidence indicates that these results are consistent with theories emphasizing the demandable nature of the deposit contract rather than theories stressing the stability of deposit funding due to government guarantees. In this regard, we show that banks under stress face large runs on retail deposits, but not on retail bonds.",
keywords = "Banks, Deposits, Maturity, Risk-taking, Government guarantee",
author = "Elena Carletti and {De Marco}, Filippo and Vasso Ioannidou and Enrico Sette",
note = "This is the author{\textquoteright}s version of a work that was accepted for publication in Journal of Financial Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Financial Economics, 141, 1, 2021 DOI: 10.1016/j.jfineco.2020.07.021",
year = "2021",
month = jul,
day = "31",
doi = "10.1016/j.jfineco.2020.07.021",
language = "English",
volume = "141",
pages = "6--26",
journal = "Journal of Financial Economics",
issn = "0304-405X",
publisher = "Elsevier",
number = "1",

}

RIS

TY - JOUR

T1 - Banks as Patient Lenders

T2 - Evidence from a Tax Reform

AU - Carletti, Elena

AU - De Marco, Filippo

AU - Ioannidou, Vasso

AU - Sette, Enrico

N1 - This is the author’s version of a work that was accepted for publication in Journal of Financial Economics. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reflected in this document. Changes may have been made to this work since it was submitted for publication. A definitive version was subsequently published in Journal of Financial Economics, 141, 1, 2021 DOI: 10.1016/j.jfineco.2020.07.021

PY - 2021/7/31

Y1 - 2021/7/31

N2 - We provide new evidence on how deposit funding affects bank lending. For identification, we exploit the 2011 reform of the investment income tax in Italy that induced households to substitute bank bonds with deposits. We find that banks with larger increases in deposits expand the supply of credit lines and long-term credit to low-risk firms. Additional evidence indicates that these results are consistent with theories emphasizing the demandable nature of the deposit contract rather than theories stressing the stability of deposit funding due to government guarantees. In this regard, we show that banks under stress face large runs on retail deposits, but not on retail bonds.

AB - We provide new evidence on how deposit funding affects bank lending. For identification, we exploit the 2011 reform of the investment income tax in Italy that induced households to substitute bank bonds with deposits. We find that banks with larger increases in deposits expand the supply of credit lines and long-term credit to low-risk firms. Additional evidence indicates that these results are consistent with theories emphasizing the demandable nature of the deposit contract rather than theories stressing the stability of deposit funding due to government guarantees. In this regard, we show that banks under stress face large runs on retail deposits, but not on retail bonds.

KW - Banks

KW - Deposits

KW - Maturity

KW - Risk-taking

KW - Government guarantee

U2 - 10.1016/j.jfineco.2020.07.021

DO - 10.1016/j.jfineco.2020.07.021

M3 - Journal article

VL - 141

SP - 6

EP - 26

JO - Journal of Financial Economics

JF - Journal of Financial Economics

SN - 0304-405X

IS - 1

ER -