Banking in Japan: Will "Too Big To Fail" Prevail?

Adrian Rixtel (), Yupana Wiwattanakantang (), ユパナ ウィワッタナカンタン, Toshiyuki Souma, 利行 相馬, Kazunori Suzuki and カズノリ スズキ

No 2002-16, CEI Working Paper Series from Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University

Abstract: This paper reviews the evolution of the Japanese banking sector and the development of the banking crisis in Japan in the context of "too big to fail." It describes the deterioration of the Japanese financial sector caused by the bad loan problems and the failure of policymakers to get a grip on the underlying problems. Even at the start of the new century, Japanese policymakers still continue to struggle to find the right policy response to tackle the banking problems and how to avoid moral hazard behavior intertwined with "too big to fail" concerns. The increasing concentration in the Japanese banking industry, which is now dominated by five huge financial conglomerates, should make it more difficult to definitely end "too big to fail" in Japanese prudential policy. In this respect, we believe that the "too big to fail" policy in Japan will prevail.

Keywords: Too big to fail; Banking crisis; Japan (search for similar items in EconPapers)
JEL-codes: G21 G33 G38 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2002-12
Note: This paper is forthcoming in Too-Big-Too-Fail: Policies and Practices in Government Bailouts, edited by Benton Gup and to be published by Quorum Books in 2003.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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