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Please use this identifier to cite or link to this item: http://hdl.handle.net/10723/1843

Title: The disclosure of non-performing loan prevented banks' evergreening policy? : Lessons from Japanese banks' experiences
Authors: SASAKI, Yuri N.
Keywords: Japanese Banks
Basel Accord
Credit Crunch
Non-performing Loan
Credit Allocation
Evergreening policy
JEL Classification: G18, G21, G28
Issue Date: 31-Jan-2014
Publisher: 明治学院大学経済学会
Abstract: This paper examines how the Basel Accord and an increase of non-performing loans affected Japanese banks' lending behaviors during the recent Japanese recession following the collapse of Japan's "bubble economy" in the early 1990s. I show that the "credit crunch" hypothesis applies to Japanese banks in this period; Japanese banks' lending decreased when the risk based capital (RBC) ratio decreased. Non-performing loans also had a big impact on Japanese banks; banks lend less when non-performing loans increase.
This paper found these effects on lending behavior across nearly all industries, with the construction and real estate sectors as the only exceptions. Lending was not effected by either the RBC ratio or non-performing loans in these two sectors. This may be due to the fact that banks continued to roll over loans to insolvent borrowers to avoid more bankruptcies; they wished to delay the bailout of the non-performing loans' hidden parts. In this sense, the Basel Accord seems to have accelerated Japanese banks' evergreening policy.
Description: 【論文/Article】
URI: http://hdl.handle.net/10723/1843
ISSN: 1349-483X
Appears in Collections:147号(2014年1月)

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