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"Role of Inter-bank Networks in the Pre-war Japanese Financial System"(in Japanese)

Author

Listed:
  • Tetsuji Okazaki

    (Faculty of Economics, University of Tokyo)

  • Michiru Sawada

    (Faculty of Eoconomics, Nagoya-Gakuin University)

Abstract

In this paper we identify networks among banks in pre-war Japan based on director interlocking data, and explore their implications. It was found that nearly 60% of banks had interlocking ties with at least one other bank. The large regional banks tended to have many interlocking ties. One of the effects of the inter-bank networks was reducing the probability of bank failure. This result is consistent with the descriptive evidences that banks supported a bank in the same network through supplying liquidity, in case it was faced with liquidity shortage. At the same time, a bank tended to choose a bank in the same network as a counterpart of consolidation, which suggests that inter-bank networks lowered the coordination cost of consolidation.

Suggested Citation

  • Tetsuji Okazaki & Michiru Sawada, 2006. ""Role of Inter-bank Networks in the Pre-war Japanese Financial System"(in Japanese)," CIRJE J-Series CIRJE-J-150, CIRJE, Faculty of Economics, University of Tokyo.
    • Handle: RePEc:tky:jseres:2006cj150
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    File URL: http://www.cirje.e.u-tokyo.ac.jp/research/dp/2006/2006cj150.pdf
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