Impacts of the Basle Capital Standard on Japanese Banks' Behavior

54 Pages Posted: 24 Oct 1998 Last revised: 23 Nov 2022

See all articles by Takatoshi Ito

Takatoshi Ito

University of Tokyo - Faculty of Economics; National Bureau of Economic Research (NBER); Ministry of Finance, Tokyo

Yuri Nagataki Sasaki

Takachiho University - Department of Commerce

Date Written: September 1998

Abstract

This paper examines how the risk based capital standards, the so-called Basle Accord between 1990 and 1993. As the Japanese stock prices fell, banks' latent capital gains, which are part of tier II capital, became smaller. Empirical findings are consistent with a view that banks with lower capital ratios tended to issue more subordinated debts (tier II) and to reduce lending (risk assets).

Suggested Citation

Ito, Takatoshi and Sasaki, Yuri Nagataki, Impacts of the Basle Capital Standard on Japanese Banks' Behavior (September 1998). NBER Working Paper No. w6730, Available at SSRN: https://ssrn.com/abstract=131420

Takatoshi Ito (Contact Author)

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Yuri Nagataki Sasaki

Takachiho University - Department of Commerce

Suginami, Tokyo 168
Japan