Non-Performing Assets of Banks and Financial Intermediation: Experiences of Japan in the Inter-War Period

Munehisa Kasuya
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Munehisa Kasuya: Research Institute for Economics & Business Administration (RIEB), Kobe University, Japan

No 99, Discussion Paper Series from Research Institute for Economics & Business Administration, Kobe University

Abstract: The Japanese banks are now holding a lot of non-performing assets as asset prices fall. The Japanese banks were also holding a large amount of non-performing assets in the inter-war period. The experiences of Japan in the inter-war period may provide useful lessons for the problem of today's Japanese banks. In this paper, we consider what effects the non-performing assets of the Japanese banks had on the financial intermediation in the inter-war period. In addition, we analyze economic meanings of those effects. We can infer from several evidences that there were the deterioration of financial intermediation in the inter-war period. According to the experiences in the inter-war period, we can also infer that the prompt action in required collection and required redemption of non-performing assets might be effective in the recovery of financial intermediation.

Keywords: Financial market; Japan; Banks (search for similar items in EconPapers)
JEL-codes: F2 G1 G2 (search for similar items in EconPapers)
Pages: 39 pages
Date: 1998-11
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Persistent link: https://EconPapers.repec.org/RePEc:kob:dpaper:99

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