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Financial Intermediation and Deregulation

A Critical Analysis of Japanese Bank-Firm Relationships

  • Book
  • © 2000

Overview

Authors:
  1. Tobias Miarka

    1. Berlin Science Center (WZB), Berlin, Germany

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Part of the book series: Contributions to Economics (CE)

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Table of contents (6 chapters)

  1. Front Matter

    Pages I-XIV
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  2. Explaining Japanese Bank-Firm Relationships: Introduction and Overview

    • Tobias Miarka
    Pages 1-5

  3. Overview of the Japanese Financial Market

    • Tobias Miarka
    Pages 6-28

  4. Data Description and Measures of Bank-Firm Relationships

    • Tobias Miarka
    Pages 29-60

  5. Banks as Monitors

    • Tobias Miarka
    Pages 61-78

  6. The Recent Economic Role of Bank-Firm Relationships

    • Tobias Miarka
    Pages 79-114

  7. Conclusion

    • Tobias Miarka
    Pages 115-116

  8. Back Matter

    Pages 117-151
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Keywords

About this book

The author develops a model of bank-firm relationships on the basis of the following general idea: Banks want to prevent moral hazard on the side of their customers. In particular they want to prevent their business customers to use bank credit for purposes different from those that have been negotiated thus damaging the bank's interest. The idea of this model is relatively simple. Banks do not extend a loan if the project for which the money is intended will probably be un­ profitable. They extend the loan if the success of the project is highly probable and if the revenues from that project are greater than the expenses of the bank for monitoring the customer. Assuming as Miarka does that the results from a successful project are certain, this model is an equivalent to minimizing moni­ toring costs. In fact, this is the outcome of the model. The banks are known to monitor their loans. They thereby signal to the capital market that they have tested the project. Therefore, the buyer of bonds of the company on the capital market may rest assured that the project is financially sound. The buyers of bonds thus avoid monitoring costs and can grant better credit conditions than the banks. Pur­ chasers of bor. . ds are free riders on the monitoring of the banks. Miarka tests his model econometrically. The results are amazingly supportive of the model.

Authors and Affiliations

  • Berlin Science Center (WZB), Berlin, Germany

    Tobias Miarka

Bibliographic Information

  • Book Title: Financial Intermediation and Deregulation

  • Book Subtitle: A Critical Analysis of Japanese Bank-Firm Relationships

  • Authors: Tobias Miarka

  • Series Title: Contributions to Economics

  • DOI: https://doi.org/10.1007/978-3-642-52425-7

  • Publisher: Physica Heidelberg

  • eBook Packages: Springer Book Archive

  • Copyright Information: Springer-Verlag Berlin Heidelberg 2000

  • Softcover ISBN: 978-3-7908-1307-4Published: 06 July 2000

  • eBook ISBN: 978-3-642-52425-7Published: 06 December 2012

  • Series ISSN: 1431-1933

  • Series E-ISSN: 2197-7178

  • Edition Number: 1

  • Number of Pages: XIV, 150

  • Topics: Public Economics, Industrial Organization, Finance, general, Quantitative Finance

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