The Impact of Japanese Monetary Policy Crisis Management on the Japanese Banking Sector
34 Pages Posted: 29 May 2017
Date Written: April 24, 2017
The paper analyses the impact of Japanese monetary policy crisis management on the Japanese banking sector since the 1998 Japanese financial crisis. It shows how low-cost liquidity provision as a means to stabilize banks has created a growing gap between deposits above lending and has compressed interest margins as the traditional source of bank’s income. Efficiency scores are compiled to estimate the impact of monetary policy crisis management on the efficiency of banks. The estimation results provide evidence that the Japanese monetary policy crisis management has contributed to declining efficiency in the banking sector despite or because of growing concentration.
Keywords: Japan, monetary policy, crisis management, banking sector, city banks, regional banks, shinkin banks, concentration
JEL Classification: E520, E580, F420, E630
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