IDEAS home Printed from https://ideas.repec.org/p/tky/fseres/98f10.html
   My bibliography  Save this paper

"Did Amakudari Undermine the Effectiveness of Regulator Monitoring in Japan?"

Author

Listed:
  • Horiuchi, Akiyoshi

    (Faculty of Economics, University of Tokyo.)

  • Katsutoshi Shimizu

    (Institute of Social Science, University of Tokyo)

Abstract

This paper investigates how the human relationship prevailing between the regulatory authorities and private banks referred to as "amakudari" has influenced the effectiveness of prudential regulation in Japan. We propose a simple model of repeated game to explain the amakudari phenomenon. Our model shows the regulatory authorities utilize monitoring as a tool of obtaining the self-enforcing amakudari relationship at the expense of stringent supervision. The statistical analysis in this paper supports the hypotheses derived from this model. Thus, our paper suggests that the traditional amakudari relationship undermines the prudence of bank management, thereby leading to the fragile banking system in Japan. This paper stresses importance of making the monitoring procedures implement by the regulatory authorities more transparent in order to prevent abuse of discretionary power by the authorities.

Suggested Citation

  • Horiuchi, Akiyoshi & Katsutoshi Shimizu, 1998. ""Did Amakudari Undermine the Effectiveness of Regulator Monitoring in Japan?"," CIRJE F-Series 98-F-10, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:fseres:98f10
    as

    Download full text from publisher

    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/98/f10/contents.htm
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Joonmo Cho & Iljoong Kim, 2001. "Jobs in the Bureaucratic Afterlife: A Corruption‐Facilitating Mechanism Associated with Law Enforcement," Southern Economic Journal, John Wiley & Sons, vol. 68(2), pages 330-348, October.
    2. Bremer, Marc & Pettway, Richard H., 2002. "Information and the market's perceptions of Japanese bank risk: Regulation, environment, and disclosure," Pacific-Basin Finance Journal, Elsevier, vol. 10(2), pages 119-139, April.
    3. van Rixtel, Adrian A. R. J. M. & Hassink, Wolter H. J., 2002. "Monitoring the Monitors: Are Old Boys Networks Being Used to Monitor Japanese Private Banks?," Journal of the Japanese and International Economies, Elsevier, vol. 16(1), pages 1-30, March.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tky:fseres:98f10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CIRJE administrative office (email available below). General contact details of provider: https://edirc.repec.org/data/ritokjp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.