Intensified Uncertainty: The Political and Economic Reality of the 1997–98 Financial Crisis and Prolonged Financial Stagnation in Japan

Yasushi Suzuki

Chapter 6 in Japan’s Financial Slump, 2011, pp 142-173 from Palgrave Macmillan

Abstract: Abstract We have argued that the traditional mode of banking and monitoring had once functioned relatively smoothly in Japan in the post-war and ‘catching-up’ period (see chapter 3 and BOJ 2001b). However, the environment that had supported the traditional mode of screening and monitoring changed dramatically over time. The changes include the intensified financial differentiation which provided prominent Japanese borrowers with more opportunities to tap diversified financial sources, the increased difficulty in managing credit risks in accordance with the internationalization and specialization of the banking business, and the financial deregulation which reduced the opportunity to capture bank rents.

Keywords: Credit Risk; Deposit Insurance; Regional Bank; Interbank Market; Herd Behaviour (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_6

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DOI: 10.1057/9780230307704_6

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