Financial Fragility in Japan: A Governance Issue

Akiyoshi Horiuchi
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Akiyoshi Horiuchi: Faculty of Economics, University of Tokyo.

No CIRJE-F-5, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: Since the beginning of the 1990s, Japan has been suffering from the serious problem of non-performing loans in the banking sector. The government have struggled with this problem for longer than half a decade without remarkable success. This paper tries to gi e an answer to the question why Japan has suffered from so serious bank crisis from the perspective of corporate governance. Needless to say, the bank is a corporation managers of which must be monitored and disciplined by some means in order to keep their managerial efficiency. However, this paper stresses the bank management has not effectively been controlled. The deficiency of governance in bank management led to the current bank crisis. In particular, the lack of effective governance in bank management could account for the delayed responses of banks to the crisis. This is the conclusion of this paper.

Pages: 40 pages
Date: 1998-06
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:98cf05

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