Structure and Temporal Change of the Credit Network between Banks and Large Firms in Japan

20 Pages Posted: 18 Dec 2010

See all articles by Yoshi Fujiwara

Yoshi Fujiwara

University of Hyogo - Graduate School of Simulation Studies

Hideaki Aoyama

RIKEN iTHEMS; Research Institute for Economy, Industry and Trade (RIETI)

Yuichi Ikeda

affiliation not provided to SSRN

Hiroshi Iyetomi

Niigata University

Wataru Souma

ATR-NIS Network Informatics Laboratories

Date Written: 2009

Abstract

We present a new approach to understanding credit relationships between commercial banks and quoted firms, and with this approach, examine the temporal change in the structure of the Japanese credit network from 1980 to 2005. At each year, the credit network is regarded as a weighted bipartite graph where edges correspond to the relationships and weights refer to the amounts of loans. Reduction in the supply of credit affects firms as debtor, and failure of a firm influences banks as creditor. To quantify the dependency and influence between banks and firms, we propose a set of scores of banks and firms, which can be calculated by solving an eigenvalue problem determined by the weight of the credit network. We found that a few largest eigenvalues and corresponding eigenvectors are significant by using a null hypothesis of random bipartite graphs, and that the scores can quantitatively describe the stability or fragility of the credit network during the 25 years. --

Keywords: Banking, credit topology, bipartite network, systemic risk

JEL Classification: E52, G21, E51

Suggested Citation

Fujiwara, Yoshi and Aoyama, Hideaki and Ikeda, Yuichi and Iyetomi, Hiroshi and Souma, Wataru, Structure and Temporal Change of the Credit Network between Banks and Large Firms in Japan (2009). Economics: The Open-Access, Open-Assessment E-Journal, Vol. 3, 2009-7, Available at SSRN: https://ssrn.com/abstract=1726875 or http://dx.doi.org/10.5018/economics-ejournal.ja.2009-7

Yoshi Fujiwara (Contact Author)

University of Hyogo - Graduate School of Simulation Studies ( email )

7-1-28 Minato-jima, Minami-machi
Chuo-ku
Kobe, Hyogo 650-0047
Japan

Hideaki Aoyama

RIKEN iTHEMS ( email )

Wako, Saitama 351-0198
Japan
+81-9019011954 (Phone)

Research Institute for Economy, Industry and Trade (RIETI) ( email )

1-3-1 Kasumigaseki
Chiyoda-ku
Tokyo 100-8901
Japan

Yuichi Ikeda

affiliation not provided to SSRN

Hiroshi Iyetomi

Niigata University ( email )

8050 Ikarashi-2-cho
Nishi-ku
Niigata, 9502181
Japan

Wataru Souma

ATR-NIS Network Informatics Laboratories ( email )

Japan

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