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Impacts of the Basle Capital Standard on Japanese Banks' Behavior

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Listed:
  • Takatoshi Ito
  • Yuri Nagataki Sasaki

Abstract

This paper examines how the risk-based capital standards, the so-called Basle Accord, influenced 87 major Japanese major Japanese banks' behavior between 1990 and 1993. As the Japanese stock prices fell, banks' latent capital gains, which is part of tier II capital became smaller. Empirical findings are consistent with a view that banks with lower capital ratios tended to issue more subordinated debts (tier II) and to reduce lending (risk assets).

Suggested Citation

  • Takatoshi Ito & Yuri Nagataki Sasaki, 1998. "Impacts of the Basle Capital Standard on Japanese Banks' Behavior," Discussion Paper Series a356, Institute of Economic Research, Hitotsubashi University.
  • Handle: RePEc:hit:hituec:a356
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    References listed on IDEAS

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    1. Sun Bae Kim & Ramon Moreno, 1994. "Stock prices and bank lending behavior in Japan," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, issue feb11.
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    6. Hall Brian J., 1993. "How Has the Basle Accord Affected Bank Portfolios?," Journal of the Japanese and International Economies, Elsevier, vol. 7(4), pages 408-440, December.
    7. Brunner, Allan D & Kamin, Steven B, 1998. "Bank Lending and Economic Activity in Japan: Did 'Financial Factors' Contribute to the Recent Downturn?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 3(1), pages 73-89, January.
    8. Pettway, Richard H. & Kaneko, Takashi & Young, Michael T., 1991. "International bank capital standards and the costs of issuing capital securities by Japanese banks," Journal of Banking & Finance, Elsevier, vol. 15(3), pages 559-580, June.
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    12. Berger, Allen N & Udell, Gregory F, 1994. "Do Risk-Based Capital Allocate Bank Credit and Cause a "Credit Crunch"' in the United States?," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 26(3), pages 585-628, August.
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    More about this item

    Keywords

    Japanese banks; capital standard; BIS;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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