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The measurement of financial intermediation in Japan

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Abstract

In this paper, we compute financial intermediation ratios for Japan (1970-2003) on a book value basis. According to our results, the intermediation ratio has remained quite stable, at around 85%. However, this stability is the result of two opposing trends : a decrease in credits and an increase in financial securities owned by financial (mostly, non banking) institutions. These two opposing trends would not have appeared if we had used traditional indicators computed as a fraction on GDP, or that build on a narrow definition of intermediation or use market value data. Fundamentally, our results provide evidence for a very close relation between intermediate financings and market financings and tend to reject the hypothesis of the Japanese financial system's convergence toward a capital market-based system.

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File URL: ftp://mse.univ-paris1.fr/pub/mse/cahiers2005/Bla05080.pdf
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Paper provided by Université Panthéon-Sorbonne (Paris 1) in its series Cahiers de la Maison des Sciences Economiques with number bla05080.

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Length: 24 pages
Date of creation: Jun 2005
Date of revision: Nov 2005
Handle: RePEc:mse:wpsorb:bla05080

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Keywords: Disintermediation; financial system; intermediaries; capital markets.;

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  1. Levine, Ross & Zervos, Sara, 1998. "Stock Markets, Banks, and Economic Growth," American Economic Review, American Economic Association, vol. 88(3), pages 537-58, June.
  2. Nobuyoshi Yamori & Nobuyoshi Yamori, 2005. "The Public Financial System in Japan - Re-verification of the ballooning theory and the privileged government enterprise theory," Finance Working Papers 22319, East Asian Bureau of Economic Research.
  3. Schmidt, Reinhard H. & Hackethal, Andreas & Tyrell, Marcel, 1999. "Disintermediation and the Role of Banks in Europe: An International Comparison," Journal of Financial Intermediation, Elsevier, vol. 8(1-2), pages 36-67, January.
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  6. Franklin Allen & Anthony M. Santomero, 1999. "What Do Financial Intermediaries Do?," Center for Financial Institutions Working Papers 99-30, Wharton School Center for Financial Institutions, University of Pennsylvania.
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  14. Jézabel Couppey-Soubeyran & Gunther Capelle-Blancard, 2003. "Le financement des agents non financiers en Europe : le rôle des intermédiaires financiers demeure prépondérant," Économie et Statistique, Programme National Persée, vol. 366(1), pages 63-95.
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Cited by:
  1. Zhanyu Ying, 2010. "Study on the measurement of China’s financial intermediation ratio in terms of stock: 1992–2006," Frontiers of Economics in China, Springer, vol. 5(3), pages 430-444, September.
  2. Jézabel Couppey-Soubeyran & Inès Chaari, 2008. "La place des banques dans le financement de l’économie tunisienne," Revue d'Économie Financière, Programme National Persée, vol. 93(3), pages 297-317.
  3. Moayedi, Vafa & Aminfard, Matin, 2011. "The Impact of Policy Shocks on Financial Structure: Empirical Results from Japan," MPRA Paper 39185, University Library of Munich, Germany.

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