The same gap emerges when using qualitative data from the ECB’s Consumer Expectations Survey. 28. See also Cœuré, B. (2019), “The rise of services and the transmission of monetary policy”, speech at the 21st Geneva Conference on the World Economy, 16 May. 29. See Galesi, A. and Rachedi, O.
This theorem, however, obviously does not hold today, and mainly for one simple reason. Interest on debt is tax-deductible; pay-outs on equity are not. How sensitive are banks to this difference in tax treatment? A study3 by IMF economists suggests that they are as sensitive as any other firm. What does this imply for the leverage of banks?