The Australian Bank Levy: Do Shareholders Pay?

Finance Research Letters, 2018

10 Pages Posted: 4 Sep 2019

See all articles by Dimitris K. Chronopoulos

Dimitris K. Chronopoulos

University of St. Andrews - School of Management

Anna L. Sobiech

University of Cologne - Center for Macroeconomic Research (CMR); University of St Andrews, School of Management

John O. S. Wilson

University of St. Andrews

Date Written: June 2018

Abstract

Since the global financial crisis, the tax treatment of banks has gained interest in academic and public policy arenas. In this paper, we investigate the stock price reaction of a small sample of commercial banks that were affected by the sudden introduction of a bank levy in Australia. The results of an event study analysis suggest that there is a significant decline in the returns of affected banks following the announcement of the bank levy. This suggests that the banks liable to pay the Australian bank levy lose a considerable percentage (5.2%) of their market capitalisation following its announcement.

Keywords: Bank levy, Taxes, Australian banks, Event Study

JEL Classification: G21, G28

Suggested Citation

Chronopoulos, Dimitris K. and Sobiech, Anna Lucia and Wilson, John O. S., The Australian Bank Levy: Do Shareholders Pay? (June 2018). Finance Research Letters, 2018, Available at SSRN: https://ssrn.com/abstract=3444163 or http://dx.doi.org/10.2139/ssrn.3444163

Dimitris K. Chronopoulos (Contact Author)

University of St. Andrews - School of Management ( email )

The Gateway
North Haugh
St. Andrews, Fife, Scotland KY16 9SS
United Kingdom

Anna Lucia Sobiech

University of Cologne - Center for Macroeconomic Research (CMR) ( email )

Cologne
Germany

University of St Andrews, School of Management ( email )

The Gateway
North Haugh
St Andrews, Fife KY16 9RJ
United Kingdom

John O. S. Wilson

University of St. Andrews ( email )

North St
Saint Andrews, Fife KY16 9AJ
United Kingdom

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