Deposit Insurance Regulatory forbearance and Economic Growth: Implications for the Japanese Banking Crisis

Kenneth Kletzer and Robert Dekle (dekle@usc.edu)

No 2005/169, IMF Working Papers from International Monetary Fund

Abstract: An endogenous growth model with financial intermediation demonstrates how deposit insurance and prudential regulatory forbearance lead to banking crises and growth declines. The model assumptions are based on features of the Japanese financial system and regulation. The model demonstrates how banking and growth crises can evolve under perfect foresight. The dynamics for economic aggregates and asset prices predicted by the model are shown to be generally consistent with the experience of the Japanese economy and financial system through the 1990s. We also test our maintained hypothesis of rational expectations using asset price data for Japan over the 1980s and 1990s.

Keywords: WP; rate of interest; capital stock; banking sector; Japanese economy; banking crises; economic growth; insurance liability; bank equity ratio; withdrawal demand; bank dividend; bank financing; Deposit insurance; Stocks; Loans; Bank credit; East Asia (search for similar items in EconPapers)
Pages: 34
Date: 2005-08-01
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.imf.org/external/pubs/cat/longres.aspx?sk=17825 (application/pdf)

Related works:
Working Paper: Deposit Insurance, Regulatory Forbearance and Economic Growth: Implications for the Japanese Banking Crisis (2004)
Working Paper: Deposit Insurance, Regulatory Forbearance and Economic Growth: Implications for the Japanese Banking Crisis (2004)
Working Paper: Deposit Insurance, Regulatory Forbearance and Economic Growth: Implications for the Japanese Banking Crisis (2004)
Working Paper: Deposit Insurance, Regulatory Forbearance and Economic Growth: Implications for the Japanese Banking Crisis (2004)
Working Paper: Deposit insurance, regulatory forbearance and economic growth: implications for the Japanese banking crisis (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:imf:imfwpa:2005/169

Ordering information: This working paper can be ordered from
http://www.imf.org/external/pubs/pubs/ord_info.htm

Access Statistics for this paper

More papers in IMF Working Papers from International Monetary Fund International Monetary Fund, Washington, DC USA. Contact information at EDIRC.
Bibliographic data for series maintained by Akshay Modi (amodi@imf.org).