Abstract
This paper surveys several facets of the way in which taxation interacts with the financial decisions of households and corporations to shape the character of financial intermediation and of the financial instruments traded in various countries. Whilst the importance of taxation in affecting corporate financial decisions is widely appreciated, little attention has been paid to the broader effects of taxation on the structure of the financial industry. This is surprising because taxes are often cited as influencing the growth of particular financial instruments. Moreover, the deductibility of interest rates on home mortgages is widely believed to have been one of the major factors behind the recent growth of household indebtedness in certain countries and to have contributed to the current problems arising from excessive lending to the housing sector.
The view expresed in this paper are personal and do not necessarily reflect those of the BIS
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Alworth, J.S., Borio, C.E.V. (1992). The linkages between taxation, private saving decisions, and financial intermediation: some international comparisons. In: Fair, D.E., De Boissieu, C. (eds) Fiscal Policy, Taxation and the Financial System in an Increasingly Integrated Europe. Financial and Monetary Policy Studies, vol 22. Springer, Dordrecht. https://doi.org/10.1007/978-94-011-2628-1_6
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DOI: https://doi.org/10.1007/978-94-011-2628-1_6
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