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Taipei,China's banking problems: lessons from the Japanese experience

Heather Montgomery

MPRA Paper from University Library of Munich, Germany

Abstract: Over the past decade, the health of the banking sector in Taipei,China has been in decline. Falling returns on assets and equity, steadily rising non-performing loans and bank runs at smaller financial institutions have highlighted problems across the banking sector as a whole. This study analyzes both the causes of, and policy responses to, the banking sector problems in Taipei,China, drawing comparisons from the experience of Japan. The author shows that there are many valuable lessons to be learned from the Japanese experience. In particular, policy makers in Taipei,China are urged to heed the early warning signs of overall banking sector problems and to avoid the policy of forbearance. Importantly, a hoped-for macroeconomic recovery cannot be relied upon to help banks “grow out” of their problems.

Keywords: bank; crisis; Taiwan; Japan (search for similar items in EconPapers)
JEL-codes: G18 G21 G32 (search for similar items in EconPapers)
Date: 2002-09
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Handle: RePEc:pra:mprapa:14939