Banking structural reforms and top income shares: regulate or deregulate?
70 Pages Posted: 5 Jan 2021
Date Written: October 26, 2020
This paper investigates if, and to what extent, banking structural reforms and the process of privatization may affect the top income shares over time. We focus on the case of Canada and Italy, which both undertook a major change within their banking sector in the early 1990s. Their banking reforms had the aim to privatize the banking sector and reintroduce the 'quasi universal banking model'. The evaluation of these policy packages is undertaken by implementing a data-driven approach, the `Synthetic Control Methodology'. Findings point out a substantial increase of the top income shares in the period post-deregulation.
Keywords: Top income shares, banks, banking deregulation, synthetic control method
JEL Classification: E65, E02, G21, G28
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