On the Real Effects of Bank Bailouts: Micro Evidence from Japan

Mariassunta Giannetti and Andrei Simonov

American Economic Journal: Macroeconomics, 2013, vol. 5, issue 1, 135-67

Abstract: Exploiting the Japanese banking crisis of the 1990s as a laboratory, we investigate the effects of bank bailouts on the supply of credit and the performance of banks’ clients. Our findings indicate that the size of capital injections relative to the initial financial condition of banks is crucial for the success of bank bailouts. Capital injections that are large enough to reestablish bank capital requirements increase the supply of credit and spur investment. In contrast, not only do capital injections that are too small fail to increase the supply of credit, but they also encourage the evergreening of nonperforming loans. (JEL E44, G21, G28, G32, G34)

JEL-codes: E44 G21 G28 G32 G34 (search for similar items in EconPapers)
Date: 2013
Note: DOI: 10.1257/mac.5.1.135
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Citations: View citations in EconPapers (165)

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Related works:
Working Paper: On the Real Effects of Bank Bailouts: Micro-Evidence from Japan (2009)
Working Paper: On the Real Effects of Bank Bailouts: Micro-Evidence from Japan (2009)
Working Paper: On the Real Effects of Bank Bailouts: Micro-Evidence from Japan (2009)
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