Sorting Out Japan’s Financial Crisis

Japan’s Saving, Financial Linkages, and Capital Mobility in East Asia before the 1997-98 Currency Crisis: An Empirical Investigation

I examine financial linkages in East Asia before the 1997-98 crisis by testing long-run and causal relationships between Japan’s saving and eight other Asian economies’ domestic investment. The results suggest that there is a long-run (cointegrating) relationship between Japan’s saving and the domestic investments of four of the five crisis economies and Taiwan. There is also evidence that Japa...

The Causes of Japan’s Financial Crisis

Japan’s Financial Crisis and Economic Stagnation

T he recent Japanese economic experience has been dismal. Growth has collapsed, deflation has taken hold and the financial system is in shambles. We begin our story by documenting the macroeconomic troubles that appear to have triggered the collapse of Japan’s financial sector. We argue, however, that the macroeconomic factors alone are not likely to explain the full extent of the problems in t...

A Survey of Systemic Risk Measures: Methodology and Application to the Japanese Market

The recent financial crisis has prompted academia, country authorities, and international bodies to study quantitative tools to monitor the financial system, especially systemic risk measures. This paper aims to outline these measures and apply them to Japan’s financial system. The paper demonstrates that they are effective tools for monitoring the robustness of financial system on a real-time ...

Banking Crisis and Mergers – The Case of Japan

In contexts where banks have strong control over firms, banking crisis may be associated with merger activity. This is because banks’ risk is reduced when their clients merge, and financial trouble creates strong incentive for banks to facilitate mergers of clients to improve banks’ risk standing. During Japan’s banking crisis in the 1990s, corporate merger activity was correlated with banks’ f...