Banking in Japan: Will "Too Big To Fail" Prevail?
This paper reviews the evolution of the Japanese banking sector and the development of the banking crisis in Japan in the context of "too big to fail." It describes the deterioration of the Japanese financial sector caused by the bad loan problems and the failure of policymakers to get a grip on the underlying problems. Even at the start of the new century, Japanese policymakers still continue to struggle to find the right policy response to tackle the banking problems and how to avoid moral hazard behavior intertwined with "too big to fail" concerns. The increasing concentration in the Japanese banking industry, which is now dominated by five huge financial conglomerates, should make it more difficult to definitely end "too big to fail" in Japanese prudential policy. In this respect, we believe that the "too big to fail" policy in Japan will prevail.
|Date of creation:||Dec 2002|
|Date of revision:|
|Note:||This paper is forthcoming in Too-Big-Too-Fail: Policies and Practices in Government Bailouts, edited by Benton Gup and to be published by Quorum Books in 2003.|
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Web page: http://cei.ier.hit-u.ac.jp/
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- Hoshi, Takeo, 2002. "The convoy system for insolvent banks: how it originally worked and why it failed in the 1990s," Japan and the World Economy, Elsevier, vol. 14(2), pages 155-180, April.
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- repec:dgr:kubrem:1990463 is not listed on IDEAS
- repec:cup:cbooks:9780521039444 is not listed on IDEAS
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- Yamori, Nobuyoshi & Murakami, Akinobu, 1999. "Does bank relationship have an economic value?: The effect of main bank failure on client firms," Economics Letters, Elsevier, vol. 65(1), pages 115-120, October.
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