We approach nancial systemic risk as a pollution issue. We study the political distortions that may occur when either regulation or taxation is adopted. A majority of low polluting portfolio owners strategically choose regulation in order to concentrate sacrices on the minority of high risk producers. Regulation is likely to be too harsh inthis case. A transaction tax has regressive e¤ects. It is voted when the majority is made by relatively large polluters. In this case, thetax level is likely to be too low.[...]
The Political Economy of Containing Financial Systemic Risk
PASSARELLI, Francesco
In corso di stampa
Abstract
We approach nancial systemic risk as a pollution issue. We study the political distortions that may occur when either regulation or taxation is adopted. A majority of low polluting portfolio owners strategically choose regulation in order to concentrate sacrices on the minority of high risk producers. Regulation is likely to be too harsh inthis case. A transaction tax has regressive e¤ects. It is voted when the majority is made by relatively large polluters. In this case, thetax level is likely to be too low.[...]File in questo prodotto:
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