Will the U.S. Bank Recapitalization Succeed? Eight Lessons from Japan

Takeo Hoshi and Anil Kashyap

No 14401, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: During the financial crisis that started in 2007, the U.S. government has used a variety of tools to try to rehabilitate the U.S. banking industry. Many of those strategies were used also in Japan to combat its banking problems in the 1990s. There are also a surprising number of other similarities between the current U.S. crisis and the recent Japanese crisis. The Japanese policies were only partially successful in recapitalizing the banks until the economy finally started to recover in 2003. From these unsuccessful attempts, we derive eight lessons. In light of these eight lessons, we assess the policies the U.S. has pursued. The U.S. has ignored three of the lessons and it is too early to evaluate the U.S. policies with respect to four of the others. So far the U.S. has avoided Japan's problem of having impaired banks prop up zombie firms.

JEL-codes: E44 G18 G28 G38 (search for similar items in EconPapers)
Date: 2008-10
New Economics Papers: this item is included in nep-ban, nep-mac and nep-ure
Note: CF EFG ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (27)

Published as Hoshi, Takeo & Kashyap, Anil K, 2010. "Will the U.S. bank recapitalization succeed? Eight lessons from Japan," Journal of Financial Economics, Elsevier, vol. 97(3), pages 398-417, September.

Downloads: (external link)
http://www.nber.org/papers/w14401.pdf (application/pdf)

Related works:
Journal Article: Will the U.S. bank recapitalization succeed? Eight lessons from Japan (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:14401

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w14401

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().