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Effects of a bank consolidation promotion policy: Evaluating Bank Law in 1927 Japan Author info | Abstract | Publisher info | Download info | Related research | Statistics Tetsuji Okazaki (Faculty of Economics, University of Tokyo)
Michiru Sawada (Faculty of Economics, Nagoyagakuin University)
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This paper investigates the impact of bank consolidations promoted by government policy, using data from pre-war Japan when the Ministry of Finance promoted bank consolidations by dint of the Bank Law of 1927. It is found that policy-promoted consolidation had a positive effect on deposit growth, especially in the period when the financial system was unstable. On the other hand, it had a negative effect on profitability, particularly when there was no dominant bank among the participants or when more than two banks participated in the consolidation. Policy-promoted consolidation in such cases was likely to be accompanied by large organizational cost.
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Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE F-Series with number
CIRJE-F-400.
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Length: 37pages
Date of creation: Feb 2006Date of revision:
Handle: RePEc:tky:fseres:2006cf400Contact details of provider: Web page: http://www.e.u-tokyo.ac.jp/cirje/index.htm
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