IDEAS home Printed from https://ideas.repec.org/p/brs/wpaper/319.html
   My bibliography  Save this paper

The Incidence of Reserve Requirements in Brazil: do Stockholders Share the Burden?

Author

Listed:
  • Cyntia F. Azevedo

    (Banco Central do Brasil)

  • Fabia A. de Carvalho

    (Banco Central do Brasil)

Abstract

There is consensus in the economic literature that reserve requirement is a tax levied upon financial intermediation. The incidence of the tax, however, is still a controversial issue. In this paper, we test whether the impact of changes in reserve requirements in the stock returns of the Brazilian financial system is different from the impact in stock returns of the rest of the economy. We find evidence that bank stock returns are not affected by changes in reserve requirements on demand deposits. In contrast, stock returns of non-financial institutions are substantially affected by such changes, suggesting that reserve requirements are a non-neutral instrument of monetary policy in Brazil. Reserve requirements on time deposits, however, are a tax paid by banks’ stockholders.

Suggested Citation

  • Cyntia F. Azevedo & Fabia A. de Carvalho, 2004. "The Incidence of Reserve Requirements in Brazil: do Stockholders Share the Burden?," Working papers - Textos para Discussao do Departamento de Economia da Universidade de Brasilia 319, Departamento de Economia da Universidade de Brasilia.
    • Handle: RePEc:brs:wpaper:319
    as

    Download full text from publisher

    File URL: http://vsites.unb.br/face/eco/cpe/TD/319agosto2004FACeCFA.pdf
    File Function: First version, 2004
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Tax Incidence; Reserve Requirements; Event Studies;
    All these keywords.

    JEL classification:

    • E5 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:brs:wpaper:319. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Luciano Póvoa (email available below). General contact details of provider: https://edirc.repec.org/data/deunbbr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.