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Dealing with a banking crisis: what lessons can be learned from Japan’s experience?

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  • Nelson, Benjamin

    ()
    (Bank of England)

  • Tanaka, Misa

    ()
    (Bank of England)

Abstract

This article examines Japan’s policies in dealing with its banking crisis during the 1991–2004 period, in order to draw lessons for policymakers today. Japan’s policy choices reflected a difficult trade-off between the need to contain moral hazard on the one hand, and the need to limit systemic risk on the other. The resolution of the crisis ultimately required recapitalising banks and resolving uncertainty over banks’ asset valuations.

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File URL: http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q104.pdf
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Bibliographic Info

Article provided by Bank of England in its journal Bank of England Quarterly Bulletin.

Volume (Year): 54 (2014)
Issue (Month): 1 ()
Pages: 36-48

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Handle: RePEc:boe:qbullt:0130

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  1. Ricardo J. Caballero & Takeo Hoshi & Anil K. Kashyap, 2006. "Zombie Lending and Depressed Restructuring in Japan," NBER Working Papers 12129, National Bureau of Economic Research, Inc.
  2. Mitsuhiro Fukao, 2003. "Financial Sector Profitability and Double-Gearing," NBER Chapters, in: Structural Impediments to Growth in Japan, pages 9-36 National Bureau of Economic Research, Inc.
  3. Mitsuhiro FUKAO, 2007. "Financial Crisis and the Lost Decade," Asian Economic Policy Review, Japan Center for Economic Research, Japan Center for Economic Research, vol. 2(2), pages 273-297.
  4. Takeo Hoshi & Anil K Kashyap, 2008. "Will the U.S. Bank Recapitalization Succeed? Eight Lessons from Japan," NBER Working Papers 14401, National Bureau of Economic Research, Inc.
  5. Kazuo Ueda, 2012. "Deleveraging and Monetary Policy: Japan since the 1990s and the United States since 2007," CARF F-Series, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo CARF-F-283, Center for Advanced Research in Finance, Faculty of Economics, The University of Tokyo.
  6. Kapan, Tümer & Minoiu, Camelia, 2013. "Balance sheet strength and bank lending during the global financial crisis," Discussion Papers 33/2013, Deutsche Bundesbank, Research Centre.
  7. Arrowsmith, Martin & Griffiths, Martin & Franklin, Jeremy & Wohlmann, Evan & Young, Garry & Gregory, David, 2013. "SME forbearance and its implications for monetary and financial stability," Bank of England Quarterly Bulletin, Bank of England, Bank of England, vol. 53(4), pages 296-303.
  8. Takeo Hoshi & Anil Kashyap, 2000. "The Japanese Banking Crisis: Where Did It Come From and How Will It End?," NBER Chapters, in: NBER Macroeconomics Annual 1999, Volume 14, pages 129-212 National Bureau of Economic Research, Inc.
  9. Prasanna Gai & Andrew G Haldane & Sujit Kapadia & Benjamin Nelson, 2013. "Bank Funding and Financial Stability," RBA Annual Conference Volume, Reserve Bank of Australia, in: Alexandra Heath & Matthew Lilley & Mark Manning (ed.), Liquidity and Funding Markets Reserve Bank of Australia.
  10. Carmen M. Reinhart & Kenneth S. Rogoff, 2009. "This Time Is Different: Eight Centuries of Financial Folly," Economics Books, Princeton University Press, Princeton University Press, edition 1, volume 1, number 8973.
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Cited by:
  1. Barnett, Alina & Batten, Sandra & Chiu, Adrian & Franklin, Jeremy & Sebastia-Barriel, Maria, 2014. "The UK productivity puzzle," Bank of England Quarterly Bulletin, Bank of England, Bank of England, vol. 54(2), pages 114-128.

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