Regulation and the cost of capital in Japan: a case study

John Ammer and Michael S. Gibson
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John Ammer: https://www.federalreserve.gov/econres/john-ammer.htm
Michael S. Gibson: https://www.federalreserve.gov/econres/michael-s-gibson.htm

No 556, International Finance Discussion Papers from Board of Governors of the Federal Reserve System (U.S.)

Abstract: Over the last several years, a combination of loan losses and regulatory barriers to equity issuance have left Japanese banks starved for capital. In September 1995, the Mitsubishi Bank was permitted to issue a complicated convertible security in a foreign market. The results of simulations of the price path of the underlying equity imply that Mitsubishi Bank's annualized risk-adjusted cost of capital through this instrument was between 80 and 310 basis points higher than if the bank had instead been able to issue common stock at its current price.

Keywords: Capital; Japan (search for similar items in EconPapers)
Date: 1996
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