01756cas a2200253 a 4500 AALejournalIMF017224 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475552805 1018-5941 BD-DhAAL BD-DhAAL Luca, Oana. Financial Sector Debt Bias / Oana Luca, Alexander Tieman. Washington, D.C. : International Monetary Fund, 2016. 1 online resource (28 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students Most tax systems create a tax bias toward debt finance. Such debt bias increases leverage and may negatively affect financial stability. This paper models and estimates debt bias in the financial sector, and present novel estimates for investment banks and non-bank financial intermediaries such as finance and insurance companies. We find debt bias to be pervasive, explaining as much as 10 percent of total leverage for regular banks and 20 percent for investment banks, with the effects most pronounced before the global financial crisis. Going forward, debt bias is likely to once again gain prominence as a key driver of leverage decisions, underscoring the importance of policy reform at this juncture. Mode of access: Internet Tieman, Alexander. IMF Working Papers; Working Paper ; No. 2016/217 Full text available on IMF http://elibrary.imf.org/view/journals/001/2016/217/001.2016.issue-217-en.xml IMF e-Library