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Working Paper
Are all banking crises alike? The Japanese experience in international comparison
This paper examines episodes of banking sector distress for a large sample of developed and developing countries, highlighting the experience of Japan. By a host of criteria, Japan appeared to be in a stronger position than most countries at the onset of banking problems - low inflation, appreciating currency, balanced government budget, and large external surpluses. However, Japan followed a clear international boom-and-bust pattern in terms of real output growth, credit growth and stock price movements. We estimate a multivariate probit model that links the likelihood of banking problems ...
Conference Paper
Lessons from financial crisis: the Japanese case
Journal Article
Financial crises and bank supervision: new directions for Japan?
Journal Article
Sorting out Japan's financial crisis
This article reports on the size of the Japanese financial crisis (currently estimated to cost taxpayers 24 percent of GDP) and sketches the likely ingredients of a successful solution. The crux is that Japan's banks, insurance companies, and government financial agencies all suffer different problems and require different solutions. But all three sectors are connected, and a failure to tackle concurrently the problems of all three promises to doom any reform plan.
Working Paper
Deposit insurance, regulatory forbearance and economic growth: implications for the Japanese banking crisis
An endogenous growth model with financial intermediation is used to show how public deposit insurance and weak prudential regulation can lead to banking crises and permanent declines in economic growth. The impact of regulatory forbearance on investment, saving and asset price dynamics under perfect foresight are derived in the model. The assumptions of the theoretical model are based on essential features of the Japanese financial system and its regulation. The model demonstrates how banking and growth crises can evolve under perfect foresight. The dynamics for economic aggregates and asset ...
Working Paper
The value of banking relationships during a financial crisis: evidence from failures of Japanese banks
In this paper, we provide evidence on the value of banking relationships by examining the stock market valuation impact of three large bank failures in Japan in 1997 and 1998 on their clients and the clients of surviving banks. Bank failures are theorized to have adverse consequences for other firms in general, and for customers of the failed institutions in particular. Firms that are customers of the failed institution may be adversely affected because, among other things, they may lose an ongoing source of funding and need to incur the expense of search and providing financial and other ...