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The Japanese Banking Crisis of the 1990's; Sources and Lessons

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  • David Woo
  • Akihiro Kanaya

Abstract

For a large part of the past decade, Japan has witnessed a steady deterioration in the health of its banking system. This paper examines what went wrong and why it has taken so long for the system to recover. While the paper traces the roots of the crisis to accelerated deregulation and deepening of capital markets without an appropriate adjustment in the regulatory framework, it identifies weak corporate governance and regulatory forbearance as the two factors behind what might have been an unnecessary prolongation of the distress of the financial system.

Suggested Citation

  • David Woo & Akihiro Kanaya, 2000. "The Japanese Banking Crisis of the 1990's; Sources and Lessons," IMF Working Papers 00/7, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:00/7
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    Citations

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    Cited by:

    1. Montgomery, Heather, 2002. "Taipei,China's banking problems: lessons from the Japanese experience," MPRA Paper 14939, University Library of Munich, Germany.
    2. Claudio Morana, 2006. "The End of the Japanese Stagnation: an Assessment of the Policy Solutions," ICER Working Papers 27-2006, ICER - International Centre for Economic Research.
    3. Ambrosius, Christian, 2017. "What explains the speed of recovery from banking crises?," Journal of International Money and Finance, Elsevier, vol. 70(C), pages 257-287.
    4. Yang Chang, 2014. "A Consistent Approach to Modelling the Interest Rate Market Anomalies Post the Global Financial Crisis," PhD Thesis, Finance Discipline Group, UTS Business School, University of Technology, Sydney, number 18, November.
    5. Gab-Je Jo, 2010. "The Transmission of Japanese Financial Shocks: Evidence from International Bank Claims on East Asian Economies," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 46(5), pages 4-17, September.
    6. Raphael Fischer & Gunther Schnabl, 2016. "Regional Heterogeneity, the Rise of Public Debt and Monetary Policy in Post-Bubble Japan: Lessons for the EMU," CESifo Working Paper Series 5908, CESifo Group Munich.
    7. Oliver Arentz & Johann Eekhoff & Christine Arentz, 2010. "Zur Finanzmarktkrise: Die Rolle der Immobilienbewertung," IWP Discussion Paper Series 01/2010, Institute for Economic Policy, Cologne, Germany.
    8. Hossain, Monzur, 2005. "Financial Deregulation and Crisis:An ‘Agency-conflict’ Case of Japan," MPRA Paper 24856, University Library of Munich, Germany.
    9. Luca Marotta & Salvatore Miccich`e & Yoshi Fujiwara & Hiroshi Iyetomi & Hideaki Aoyama & Mauro Gallegati & Rosario N. Mantegna, 2015. "Backbone of credit relationships in the Japanese credit market," Papers 1511.06870, arXiv.org.
    10. Hossain, Monzur, 2005. "Financial Deregulations, Conflict of Interest and Banking Crisis in Japan: A Decision-theoretic-GARCH Approach to Analyze the Management Behavior," MPRA Paper 24858, University Library of Munich, Germany.

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