Loans to Japanese Borrowers

37 Pages Posted: 18 Jul 2003

See all articles by David C. Smith

David C. Smith

University of Virginia - McIntire School of Commerce

Date Written: June 2003


This paper examines the characteristics of loans to Japanese borrowers using a relatively unexplored, contract-specific data set. I find that Japanese banks charge less on loans to Japanese borrowers than do foreign banks, holding constant many of the risk characteristics of the borrower. Moreover, Japanese banks vary pricing less across these risks than do foreign banks, suggesting that Japanese banks tend not to distinguish good risks from bad. Taken together, the results suggest that problems at Japanese banks stem from the behavior of the banks themselves, not simply from poor economic conditions. I also document a significant shortening in the maturity structure of Japanese loans in the late 1990s.

Keywords: Japanese banks, bank loans, syndicated lending

JEL Classification: G21, G32, F34

Suggested Citation

Smith, David Carl, Loans to Japanese Borrowers (June 2003). FRB International Finance Discussion Paper No. 769. Available at SSRN: or

David Carl Smith (Contact Author)

University of Virginia - McIntire School of Commerce ( email )

P.O. Box 400173
Charlottesville, VA 22904-4173
United States

Register to save articles to
your library


Paper statistics

Abstract Views
PlumX Metrics