Long-run Unit Cost of Financial Intermediation in Japan (Japanese)

Hiroshi Gunji, Arito Ono, Masato Shizume, Hirofumi Uchida and Yukihiro Yasuda

Discussion Papers (Japanese) from Research Institute of Economy, Trade and Industry (RIETI)

Abstract: We estimate the long-run unit cost of financial intermediation in Japan. Philippon (2015) and Bazot (2018a) respectively estimate the unit cost of financial intermediation in the US and Europe as the ratio of the financial industry income (numerator) to the financial industry output (denominator). To measure the financial industry income, we add several elements that are not included as the financial industry's value added in the System of National Accounts (SNA): net interest income and dividends from assets and liabilities other than loans and deposits, capital gains or losses from banks' securities portfolios, and credit costs associated with non-performing loans. We find that the unit cost of financial intermediation in Japan exhibits secular decline, which is not observed in the US and some European countries.

Pages: 49 pages
Date: 2021-09
New Economics Papers: this item is included in nep-fdg
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Persistent link: https://EconPapers.repec.org/RePEc:eti:rdpsjp:21048

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