Theoretical Framework and Basic Analysis of Monitoring Activities

Yasushi Suzuki

Chapter 2 in Japan’s Financial Slump, 2011, pp 16-48 from Palgrave Macmillan

Abstract: Abstract Despite very significant discussions in the literature on the institutional specificities of the Japanese banking system, less has been done to investigate the reasons why the institutional changes in Japan’s financial system, especially reforms that attempted to change the framework of monitoring activities resulted in poor outcomes for the Japanese economy. In the banking sector, the framework of monitoring activities, include: (1) the mechanisms through which credit risk is monitored by banks as lenders (and by investors in general) by collecting information about borrowers and screening firms that are potential borrowers; (2) the mechanisms through which financial authorities, as regulators, monitor and supervise financial institutions by collecting information about the activities of banks and investors, setting regulatory rules and implementing these rules together with associated sanctions (see Figure 2.1).

Keywords: Credit Risk; Credit Market; Capital Requirement; Security Market; Financial Intermediary (search for similar items in EconPapers)
Date: 2011
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Persistent link: https://EconPapers.repec.org/RePEc:pal:pmschp:978-0-230-30770-4_2

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DOI: 10.1057/9780230307704_2

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