Reform of the Japanese banking system |
| |
Authors: | Masahiro Kawai |
| |
Institution: | (1) Institute of Social Science, University of Tokyo, 7-3-1 Hongo, Bunkyo-ku, Tokyo 113, Japan |
| |
Abstract: | Japan has experienced a decade-long economic stagnation with a distressed banking sector in the 1990s. The absence of a credit
culture to rigorously assess and price credit risks of borrowers, aggravated by weak prudential and supervisory frameworks,
in the 1980s, the collapse of the asset price bubble in the early 1990s, and the lack of decisive, comprehensive strategy
to address the banking sector problem at an early stage were largely responsible for the emergence of banking sector problems.
All of these allowed a systemic banking crisis to emerge in 1997–98 and a large output loss during 1998–2002. The crisis ultimately
prompted the government to take a more aggressive policy to tackle the problem. Considerable progress has been made since
then on banking sector stabilization, restructuring, and consolidation. The regulatory and supervisory framework has been
strengthened in a way consistent with an increasingly market-oriented, globalized environment. As a result, the worst is over
in the Japanese banking system, setting the stage for sustained economic recovery. Though bank capital may still be inadequate,
safety nets are in place, and credit allocation has been made more rational. Remaining risks are limited to regional and smaller
institutions that are vulnerable to weak, local economic conditions and hikes of the long-term interest rate.
|
| |
Keywords: | Asset price bubble Japan’ s “ lost decade” Systemic banking sector crisis Bank restructuring and consolidation Market-based regulatory and supervisory framework |
本文献已被 SpringerLink 等数据库收录! |
|