Interbank Networks in Prewar Japan: Structure and Implications Interbank Networks in Prewar Japan: Structure and Implications
AbstractIn this paper, we explore the structure and implications of interbank networks in prewar Japan, focusing on director interlocking. We find that approximately half the banks had at least one connection with another bank through director interlocking, and that a bank that had connections with other banks was less likely to fail than a bank without a network. The quality of networks also matters in the sense that the failure probability of a bank with a network was negatively associated with the profitability of the connected banks. On the other hand, there is no strong evidence of financial contagion through networks. In addition, networks of director interlocking contributed to the stabilization of the financial system through coordinating bank mergers.
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Bibliographic InfoPaper provided by Institute of Economic Research, Hitotsubashi University in its series PRIMCED Discussion Paper Series with number 21.
Length: 43,  p.
Date of creation: Jul 2011
Date of revision:
Networks; Banks; Director Interlocking; Mergers; Japan;
Find related papers by JEL classification:
- G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
- L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- N25 - Economic History - - Financial Markets and Institutions - - - Asia including Middle East
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-04-10 (All new papers)
- NEP-HIS-2012-04-10 (Business, Economic & Financial History)
- NEP-NET-2012-04-10 (Network Economics)
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