Will the U.S. Bank Recapitalization Succeed? Eight Lessons from Japan
58 Pages Posted: 13 Aug 2009 Last revised: 26 Aug 2009
There are 2 versions of this paper
Will the U.S. Bank Recapitalization Succeed? Eight Lessons from Japan
Will the U.S. Bank Recapitalization Succeed? Eight Lessons from Japan
Date Written: August 12, 2009
Abstract
During the financial crisis that started in 2007, the U.S. government has used a variety of tools to try to rehabilitate the U.S. banking industry. Many of those strategies were used also in Japan to combat its banking problems in the 1990s. There are also a surprising number of other similarities between the current U.S. crisis and the recent Japanese crisis. The Japanese policies were only partially successful in recapitalizing the banks until the economy finally started to recover in 2003. From these unsuccessful attempts, we derive eight lessons. In light of these eight lessons, we assess the policies the U.S. has pursued. The U.S. has ignored three of the lessons and it is too early to evaluate the U.S. policies with respect to four of the others. So far the U.S. has avoided Japan’s problem of having impaired banks prop up zombie firms.
Suggested Citation: Suggested Citation
Do you have a job opening that you would like to promote on SSRN?
Recommended Papers
-
Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts
By Emmanuel Farhi and Jean Tirole
-
Collective Moral Hazard, Maturity Mismatch and Systemic Bailouts
By Emmanuel Farhi and Jean Tirole
-
By Thomas Philippon and Philipp Schnabl
-
By Thomas Philippon and Philipp Schnabl
-
By Thomas Philippon and Philipp Schnabl
-
By Thomas Philippon and Philipp Schnabl
-
By Dinara Bayazitova and Anil Shivdasani
-
On the Real Effects of Bank Bailouts: Micro-Evidence from Japan
-
On the Real Effects of Bank Bailouts: Micro-Evidence from Japan