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"Role of Inter-bank Networks in the Pre-war Japanese Financial System"(in Japanese)

Tetsuji Okazaki and Michiru Sawada
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Tetsuji Okazaki: Faculty of Economics, University of Tokyo

No CIRJE-J-150, CIRJE J-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: In this paper we identify networks among banks in pre-war Japan based on director interlocking data, and explore their implications. It was found that nearly 60% of banks had interlocking ties with at least one other bank. The large regional banks tended to have many interlocking ties. One of the effects of the inter-bank networks was reducing the probability of bank failure. This result is consistent with the descriptive evidences that banks supported a bank in the same network through supplying liquidity, in case it was faced with liquidity shortage. At the same time, a bank tended to choose a bank in the same network as a counterpart of consolidation, which suggests that inter-bank networks lowered the coordination cost of consolidation.

Pages: 21 pages
Date: 2006-03
New Economics Papers: this item is included in nep-ban, nep-his, nep-net and nep-soc
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Handle: RePEc:tky:jseres:2006cj150