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Development Bank of Japan Research Series

Priority Rule Violations and Perverse Banking Behaviors

Theoretical Analysis and Implications of the 1990s Japanese Loan Markets

Authors: Seshimo, Hiroyuki, Yamazaki, Fukuju

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  • Provides theoretical arguments to consistently explain contradictory-appearing Japanese banking behaviors in the 1990s, i.e., the credit crunch and inefficient additional lending
  • Differs from the typical explanations of the credit crunch that are based mainly on the debt overhang theory or BIS regulation of capital adequacy ratios
  • Explores the optimal legal rule or scheme for insolvent firms to make efficient investment decisions 
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書籍の購入

イーブック ¥6,176
価格の適用国: Japan (日本円価格は個人のお客様のみ有効) (小計)
  • ISBN 978-981-10-5852-3
  • ウォーターマーク付、 DRMフリー
  • ファイル形式: PDF, EPUB
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ソフトカバー ¥7,721
価格の適用国: Japan (日本円価格は個人のお客様のみ有効) (小計)
  • ISBN 978-981-10-5851-6
  • 個人のお客様には、世界中どこでも配送料無料でお届けします。
  • Usually dispatched within 3 to 5 business days.
この書籍について

This book theoretically and empirically explores why Japanese banks engaged in seemingly contradictory behaviors in the 1990s, namely, the credit crunch and evergreening, i.e., inefficient additional lending. A credit crunch occurs when banks are unwilling to finance good and efficient projects.  Evergreening implies that banks reluctantly lend additional money to poorly performing and financially vulnerable firms. The authors hypothesize that these practices stemmed from violation of the absolute priority rule (APR) by creditors, thus making it possible to explain this seemingly contradictory banking behavior in a consistent way.

In Japan, the APR has often been violated legally by courts and some governmental acts. Examples from the 1990s involve legal abuse in the form of short-term tenancy protection (tanki chinshaku ken) and political intervention in the liquidation of Housing Loan Companies, or  Ju-sen. The Supreme Court of Japan has issued critical decisions leading to serious violations of APR in the early 1990s. Evidence provided here supports theoretical results.  Empirical testing for a significant difference in banking behavior before and after the Court decision using data from Japanese firms in the 1980s and 1990s found that theoretical arguments were empirically supportable in the last half of the 1980s and through the 1990s.  Finally, based on their analysis, from the theoretical point of view the authors consider the optimal legal scheme to achieve the best assessment of initial and additional lending in light of the legal reform of the 2000s. 

著者について

Hiroyuki Seshimo is a professor of economics and finance at Senshu University and visiting scholar of the Research Institute of Capital Formation, Development Bank of Japan. His main areas of research are finance, urban economics, law and economics, and monetary economics. Born in 1967, Prof. Seshimo received a Bachelor’s degree in economics from Sophia University in 1990 and a Ph.D. in economics from Keio University in 2004. He was appointed professor of economics at Senshu University in 2005.

Fukuju Yamazaki is a professor of economics at the College of Economics, Nihon University of Tokyo; His research areas are urban economics, land and housing economics, and law and economics. Born in 1954, He received a Bachelor’s degree in economics in 1976 and a Ph.D. in economics from Sophia University of Tokyo in 2000. He was a lecturer, an assistant professor and a professor of economics at Sophia University from 1983 to 2012 and appointed a professor emeritus of Sophia University.

 

Table of contents (7 chapters)

Table of contents (7 chapters)

書籍の購入

イーブック ¥6,176
価格の適用国: Japan (日本円価格は個人のお客様のみ有効) (小計)
  • ISBN 978-981-10-5852-3
  • ウォーターマーク付、 DRMフリー
  • ファイル形式: PDF, EPUB
  • どの電子書籍リーダーからでもすぐにお読みいただけます。
  • ご購入後、すぐにダウンロードしていただけます。
ソフトカバー ¥7,721
価格の適用国: Japan (日本円価格は個人のお客様のみ有効) (小計)
  • ISBN 978-981-10-5851-6
  • 個人のお客様には、世界中どこでも配送料無料でお届けします。
  • Usually dispatched within 3 to 5 business days.
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書誌情報

Bibliographic Information
Book Title
Priority Rule Violations and Perverse Banking Behaviors
Book Subtitle
Theoretical Analysis and Implications of the 1990s Japanese Loan Markets
Authors
Series Title
Development Bank of Japan Research Series
Copyright
2017
Publisher
Springer Singapore
Copyright Holder
Development Bank of Japan
イーブック ISBN
978-981-10-5852-3
DOI
10.1007/978-981-10-5852-3
ソフトカバー ISBN
978-981-10-5851-6
Series ISSN
2367-0967
Edition Number
1
Number of Pages
XI, 80
Number of Illustrations
4 illustrations in colour
Topics