Some Structural Causes of Japan’s Banking Problems
This paper reviews corporate finance literature which explains some of the long-term causes of the Japanese banking sector’s poor performance in the early 1990s. It concentrates on the ideas that an adverse selection problem developed in the bank lending market during the 1980s, and that banks had strong incentives to seek out borrowers which were of lower quality and which had greater exposure to adverse movements in asset prices. Possible links between these hypotheses and the macroeconomic environment are also considered.
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NBER Working Papers
7250, National Bureau of Economic Research, Inc.
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- Hodder, James E., 1991. "Is the cost of capital lower in japan?," Journal of the Japanese and International Economies, Elsevier, vol. 5(1), pages 86-100, March.
- Edward J. Lincoln, 1998. "Japan's Financial Problems," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 29(2), pages 347-385.
- Sadahiko Suzuki & Richard W Wright, 1985. "Financial Structure and Bankruptcy Risk in Japanese Companies," Journal of International Business Studies, Palgrave Macmillan, vol. 16(1), pages 97-110, March.
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