Suchergebnisse

AbstractIn 1997, the U.S. Treasury introduced Inflation Protected Securities, commonly known as TIPS. Several in the finance field have since described these securities as "tax disadvantaged" relative to conventional securities, leading to serious questions regarding their appropriateness outside of tax‐deferred accounts. In this article, we develop a framework that demonstrates that at least in a real sense the tax treatment of TIPS is trivially different from that of conventional Treasury securities. Moreover, empirically we find evidence that TIPS generally have after‐tax yields comparable to, if not exceeding, conventional fixed‐rate Treasury securities. We also show that TIPS have generally outperformed matched‐maturity conventional Treasury securities in terms of after‐tax rates of return.

AbstractIn 1990, the Federal Reserve reduced reserve requirements on large, nonpersonal time deposits and net Eurocurrency liabilities. In this article we provide evidence on who gained from the reduction in this tax. No evidence is found to suggest that large depositors gained by way of higher yields. Rather, evidence indicates a decline in Eurodollar interest rates relative to other money market rates. Evidence further shows that bank shareholders were recipients of abnormal share price appreciation following the announcement. There is little evidence to indicate that shareholders outside of the banking industry experienced similar abnormal gains.