Menu Expand

Cite JOURNAL ARTICLE

Style

Murai, TSchnabl, G (2021). The Japanese Banks in the Lasting Low-, Zero- and Negative-Interest Rate Environment. Credit and Capital Markets – Kredit und Kapital, 54(1), 1-16. https://doi.org/10.3790/ccm.54.1.1
Murai, Taiki Schnabl, GuntherMurai, Taiki Schnabl, Gunther (2021). "The Japanese Banks in the Lasting Low-, Zero- and Negative-Interest Rate Environment" Credit and Capital Markets – Kredit und Kapital, vol. 54no. 1, 2021 pp. 1-16. https://doi.org/10.3790/ccm.54.1.1
Murai, TSchnabl, G (2021). The Japanese Banks in the Lasting Low-, Zero- and Negative-Interest Rate Environment. Credit and Capital Markets – Kredit und Kapital, Vol. 54 (Issue 1), pp 1-16. https://doi.org/10.3790/ccm.54.1.1

Format

The Japanese Banks in the Lasting Low-, Zero- and Negative-Interest Rate Environment

Murai, Taiki | Schnabl, Gunther

Credit and Capital Markets – Kredit und Kapital, Vol. 54 (2021), Iss. 1 : pp. 1–16

1 Citations (CrossRef)

Additional Information

Article Details

Author Details

Taiki Murai, Leipzig University, Institute of Economic Policy, Grimmaische Straße 12, 04109 Leipzig, Germany.

Gunther Schnabl, Leipzig University, Institute of Economic Policy, Grimmaische Straße 12, 04109 Leipzig, Germany.

Cited By

  1. The Impact of the Bank of Japan’s Low-Interest Rate Policy on the Japanese Banking Sector

    Gerstenberger, Juliane

    Schnabl, Gunther

    Credit and Capital Markets – Kredit und Kapital, Vol. 54 (2021), Iss. 4 P.533

    https://doi.org/10.3790/ccm.54.4.533 [Citations: 0]

References

  1. Bayoumi, T./Collyns, C. (2000): Post Bubble Blues. How Japan Responded to Asset Price Collapse. International Monetary Fund, Washington D.C.  Google Scholar
  2. Berger, A./Udell, G. (1998): The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle. Journal of Banking and Finance Vol. 22(6–8), 613–673.  Google Scholar
  3. Caballero, R./Hoshi, T./Kashyap, A. (2008): Zombie Lending and Depressed Restructuring in Japan. American Economic Review Vol. 98(5), 1943–1977.  Google Scholar
  4. Diamond, D. (1984): Financial Intermediation and Delegated Monitoring. The Review of Economics and Statistics Vol. 51(3), 393–414.  Google Scholar
  5. Funabashi, Y. (1989): Managing the Dollar: From the Plaza to the Louvre. Institute of International Economics, Washington D.C.  Google Scholar
  6. Gerstenberger, J./Schnabl, G. (2017): The Impact of Japanese Monetary Policy Crisis Management on the Japanese Banking Sector. CESifo Working Paper 6440.  Google Scholar
  7. Hosono, K./Sakai, K./Tsuru, K. (2007): Consolidation of Banks in Japan: Causes and Consequences. NBER Working Paper 13399.  Google Scholar
  8. Ishikawa, D./Tsutsui, Y. (2006): Has a Credit Crunch Occurred in Japan. RIETI Discussion Paper 06-E-012.  Google Scholar
  9. Koo, R. (2003): Balance Sheet Recession: Japan’s Struggle with Uncharted Economics and its Global Implications, Wiley and Sons.  Google Scholar
  10. Latsos, S. (2019a): The Low Interest Policy and the Household Saving Behavior in Japan. University of Leipzig, Faculty for Economics and Management Science Working Paper 159.  Google Scholar
  11. Latsos, S. (2019b): Real Wage Effects of Japanese Monetary Policy. ORDO Vol. 69, 177–215.  Google Scholar
  12. Latsos, S./Israel, K.-F. (2020): The Impact of (Un)Conventional Expansionary Monetary Policy on Income Inequality – Lessons from Japan. Applied Economics Vol. 52(40), 4403–4420.  Google Scholar
  13. Montgomery, H./Shimizutani, S. (2009): The Effectiveness of Bank Recapitalization Policies in Japan. Japan and the World Economy Vol. 21(1), 1–25.  Google Scholar
  14. Nihonkeizai Shinbun (日本経済新聞) (22.5.2005): プライベートバンク (Private Bank).  Google Scholar
  15. Nihonkeizai Shinbun (日本経済新聞) (3.3.2020): 地銀、合併しやすく独禁法除外へ特別法案 閣議決案. (Regionalbanken: Kabinett beschließt Sondergesetz für Ausnahmen vom Monopolgesetz, die Fusionen erleichtern.).  Google Scholar
  16. Nikkei Asian Review (18.3.2016): Japan’s Regional Banks Team Up in Asset Management.  Google Scholar
  17. Peek, J./Rosengren, E. (2005): Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan. American Economic Review Vol. 95(4), 1144–1166.  Google Scholar
  18. Posen, A. (2000): The Political Economy of Deflationary Monetary Policy. In: Mikitani, Ryoichi/Posen, Adam (eds.): Japan’s Financial Crisis and Its Parallels to U.S. Experience, Institute for International Economics, Washington D.C., p.194–208.  Google Scholar
  19. Ross, S. (2016): Japan’s Nonperforming Loans Cap Future Growth. Investopedia 5.6.2016, 90.  Google Scholar
  20. Saiki, A./Frost, J. (2014): Does Unconventional Monetary Policy Affect Inequality? Evidence from Japan. Applied Economics Vol. 46(36), 4445–4454.  Google Scholar
  21. Schnabl, G. (2015): Monetary Policy and Structural Decline: Lessons from Japan for the European Crisis. Asian Economic Papers Vol. 14(1), 124–150.  Google Scholar
  22. Schnabl, G. (2020): Japans Banken in der Krise: Folgen von 30 Jahren Niedrigzinspolitik. SpringerGabler, Wiesbaden.  Google Scholar
  23. Sekine, T./Kobayashi, K./Saita, Y. (2003): Forbearance Lending: The Case of Japanese Firms. Bank of Japan Institute for Monetary and Economic Studies Vol. 21(2), 69–92.  Google Scholar
  24. Shimizu, Y. (2000): Convoy Regulation, Bank Management, and the Financial Crisis in Japan. in: Mikitani, Ryoichi and Posen, Adam (eds.), Japan’s Financial Crisis and Its Parallels to U.S. Experience, Institute for International Economics, Washington D.C., p. 57–97.  Google Scholar
  25. Uchida, H. (2010): 緊急保証制度とかつての特別保証制度の違い (The Difference between the Emergency Guarantee System and the Special Credit Guarantee System), 立法と調査 Vol. 301, 160–168.  Google Scholar
  26. Uesugi, I./Sakai, K./Yamashiro, G. (2006): Effectiveness of Credit Guarantees in the Japanese Loan Market. Journal of the Japanese and International Economies Vol. 24(4), 457–480.  Google Scholar
  27. Yoshino, N./Taghizadeh-Hesary, F./Miyamoto, H. (2017): The Effectiveness of the Negative Interest Rate Policy in Japan. Credit and Capital Markets Vol. 50(2), 189–212.  Google Scholar
  28. Berger, A./Udell, G. (1998): The Economics of Small Business Finance: The Roles of Private Equity and Debt Markets in the Financial Growth Cycle. Journal of Banking and Finance Vol. 22(6–8), 613–673.  Google Scholar
  29. Diamond, D. (1984): Financial Intermediation and Delegated Monitoring. The Review of Economics and Statistics Vol. 51(3), 393–414.  Google Scholar
  30. Funabashi, Y. (1989): Managing the Dollar: From the Plaza to the Louvre. Institute of International Economics, Washington D.C.  Google Scholar
  31. Gerstenberger, J./Schnabl, G. (2017): The Impact of Japanese Monetary Policy Crisis Management on the Japanese Banking Sector. CESifo Working Paper 6440.  Google Scholar
  32. Latsos, S. (2019a): The Low Interest Policy and the Household Saving Behavior in Japan. University of Leipzig, Faculty for Economics and Management Science Working Paper 159.  Google Scholar
  33. Latsos, S. (2019b): Real Wage Effects of Japanese Monetary Policy. ORDO Vol. 69, 177–215.  Google Scholar
  34. Latsos, S./Israel, K.-F. (2020): The Impact of (Un)Conventional Expansionary Monetary Policy on Income Inequality – Lessons from Japan. Applied Economics Vol. 52(40), 4403–4420.  Google Scholar
  35. Montgomery, H./Shimizutani, S. (2009): The Effectiveness of Bank Recapitalization Policies in Japan. Japan and the World Economy Vol. 21(1), 1–25.  Google Scholar
  36. Nihonkeizai Shinbun (??????) (3.3.2020): ??????????????????? ????. (Regionalbanken: Kabinett beschließt Sondergesetz für Ausnahmen vom Monopolgesetz, die Fusionen erleichtern.).  Google Scholar
  37. Nikkei Asian Review (18.3.2016): Japan’s Regional Banks Team Up in Asset Management.  Google Scholar
  38. Peek, J./Rosengren, E. (2005): Unnatural Selection: Perverse Incentives and the Misallocation of Credit in Japan. American Economic Review Vol. 95(4), 1144–1166.  Google Scholar
  39. Posen, A. (2000): The Political Economy of Deflationary Monetary Policy. In: Mikitani, Ryoichi/Posen, Adam (eds.): Japan’s Financial Crisis and Its Parallels to U.S. Experience, Institute for International Economics, Washington D.C., p.194–208.  Google Scholar
  40. Uchida, H. (2010): ???????????????????? (The Difference between the Emergency Guarantee System and the Special Credit Guarantee System), ????? Vol. 301, 160–168.  Google Scholar
  41. Uesugi, I./Sakai, K./Yamashiro, G. (2006): Effectiveness of Credit Guarantees in the Japanese Loan Market. Journal of the Japanese and International Economies Vol. 24(4), 457–480.  Google Scholar
  42. Yoshino, N./Taghizadeh-Hesary, F./Miyamoto, H. (2017): The Effectiveness of the Negative Interest Rate Policy in Japan. Credit and Capital Markets Vol. 50(2), 189–212.  Google Scholar
  43. Hosono, K./Sakai, K./Tsuru, K. (2007): Consolidation of Banks in Japan: Causes and Consequences. NBER Working Paper 13399.  Google Scholar
  44. Ishikawa, D./Tsutsui, Y. (2006): Has a Credit Crunch Occurred in Japan. RIETI Discussion Paper 06-E-012.  Google Scholar
  45. Ross, S. (2016): Japan’s Nonperforming Loans Cap Future Growth. Investopedia 5.6.2016, 90.  Google Scholar
  46. Koo, R. (2003): Balance Sheet Recession: Japan’s Struggle with Uncharted Economics and its Global Implications, Wiley and Sons.  Google Scholar
  47. Saiki, A./Frost, J. (2014): Does Unconventional Monetary Policy Affect Inequality? Evidence from Japan. Applied Economics Vol. 46(36), 4445–4454.  Google Scholar
  48. Schnabl, G. (2015): Monetary Policy and Structural Decline: Lessons from Japan for the European Crisis. Asian Economic Papers Vol. 14(1), 124–150.  Google Scholar
  49. Schnabl, G. (2020): Japans Banken in der Krise: Folgen von 30 Jahren Niedrigzinspolitik. SpringerGabler, Wiesbaden.  Google Scholar
  50. Sekine, T./Kobayashi, K./Saita, Y. (2003): Forbearance Lending: The Case of Japanese Firms. Bank of Japan Institute for Monetary and Economic Studies Vol. 21(2), 69–92.  Google Scholar
  51. Shimizu, Y. (2000): Convoy Regulation, Bank Management, and the Financial Crisis in Japan. in: Mikitani, Ryoichi and Posen, Adam (eds.), Japan’s Financial Crisis and Its Parallels to U.S. Experience, Institute for International Economics, Washington D.C., p. 57–97.  Google Scholar
  52. Bayoumi, T./Collyns, C. (2000): Post Bubble Blues. How Japan Responded to Asset Price Collapse. International Monetary Fund, Washington D.C.  Google Scholar
  53. Caballero, R./Hoshi, T./Kashyap, A. (2008): Zombie Lending and Depressed Restructuring in Japan. American Economic Review Vol. 98(5), 1943–1977.  Google Scholar
  54. Nihonkeizai Shinbun (??????) (22.5.2005): ????????? (Private Bank).  Google Scholar

Abstract

The bursting of the Japanese bubble economy in the early 1990s put the stage for a lasting low-, zero-, and negative-interest rate environment, which fundamentally changed the business environment for the Japanese commercial banks. On the income side, with interest margins becoming increasingly depressed, net interest revenues declined, which forced the banks to expand revenues from fees and commissions. The banks had to cut costs by reducing the number of employees, closing branches and merging into larger banks. The gradual concentration process has most recently cumulated in the relaxation of the monopoly law. With the capital allocation function of banks being undermined, the Japanese economy has become zombified, suffering from anemic growth.