Tetsuji Okazaki (Faculty of Economics, University of Tokyo) Michiru Sawada (Faculty of Eoconomics, Nagoya-Gakuin University)
Abstract
In this paper we identify networks among banks in pre-war Japan based on director interlocking data, and explore their implications. It was found that nearly 60% of banks had interlocking ties with at least one other bank. The large regional banks tended to have many interlocking ties. One of the effects of the inter-bank networks was reducing the probability of bank failure. This result is consistent with the descriptive evidences that banks supported a bank in the same network through supplying liquidity, in case it was faced with liquidity shortage. At the same time, a bank tended to choose a bank in the same network as a counterpart of consolidation, which suggests that inter-bank networks lowered the coordination cost of consolidation.
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Publisher Info
Paper provided by CIRJE, Faculty of Economics, University of Tokyo in its series CIRJE J-Series with number
CIRJE-J-150.