In Search of "Capital Crunch": Supply Factors Behind the Credit Slowdown in Japan
January 1, 1999
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Summary
The seeming failure of loose monetary policy to reactivate Japan’s economy has led some observers to suggest that the usual credit channels through which monetary policy affects the real economy are blocked, and this because of a pervasive shortage of bank capital that has induced a leftward shift in the supply of bank credit: the so called credit crunch hypothesis. This paper finds support for the hypothesis in the 1997 bank data—a year during which the landscape of the Japanese financial system was changed fundamentally—but finds no, or even contrary, evidence, for most of the 1990’s.
Subject: Bank credit, Banking, Capital adequacy requirements, Credit, Financial institutions, Financial regulation and supervision, Loans, Money, Nonperforming loans
Keywords: bank, bank capital, Bank Capitalization, Bank credit, bank data, bank restructuring package, Capital adequacy requirements, capital base, capitalized bank, city bank, Credit, Credit Crunch, developments bank, East Asia, Japanese Banks, loan, loan growth, Loans, long-term credit bank, loss reserve cover, Nonperforming loans, reserve cover, securities holding, South Asia, trust bank, WP
Pages:
28
Volume:
1999
DOI:
Issue:
003
Series:
Working Paper No. 1999/003
Stock No:
WPIEA0031999
ISBN:
9781451841886
ISSN:
1018-5941
