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

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Murai, T., Schnabl, G. 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 and Schnabl, Gunther "The Japanese Banks in the Lasting Low-, Zero- and Negative-Interest Rate Environment" Credit and Capital Markets – Kredit und Kapital 54.1, 2021, 1-16. https://doi.org/10.3790/ccm.54.1.1
Murai, Taiki/Schnabl, Gunther (2021): The Japanese Banks in the Lasting Low-, Zero- and Negative-Interest Rate Environment, in: Credit and Capital Markets – Kredit und Kapital, vol. 54, iss. 1, 1-16, [online] https://doi.org/10.3790/ccm.54.1.1
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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

3 Citations (CrossRef)

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Article Details

Publisher Name
Duncker & Humblot
DOI
https://doi.org/10.3790/ccm.54.1.1
Language
English
Pages
16
Keywords

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: 1]

  2. Niedrigzinspolitik und Sparkultur in Japan: Implikationen für die Wirtschaftspolitik (Low Interest Rate Policy and Savings Culture in Japan: Implications for Economic Policy)

    Schnabl, Gunther | Sepp, Tim

    SSRN Electronic Journal , Vol. (2021), Iss.

    https://doi.org/10.2139/ssrn.3909683 [Citations: 0]

  3. Niedrigzinspolitik und Sparkultur in Japan: Implikationen für die Wirtschaftspolitik

    Schnabl, Gunther | Sepp, Tim

    ORDO, Vol. 72-73 (2023), Iss. 1 P.392

    https://doi.org/10.1515/ordo-2023-2001 [Citations: 0]

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  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
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  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
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  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
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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.

Table of Contents

Section Title Page Action Price
Taiki Murai / Gunther Schnabl: The Japanese Banks in the Lasting Low-, Zero- and Negative-Interest Rate Environment 1
Abstract 1
1. Introduction 1
2. The Origin and the Macroeconomic Environment of the Persistent Banking Crisis 3
2.1 The Japanese Bubble Economy 3
2.2 Macroeconomic Responses to the Lasting Crisis 3
2.3 Credit Guarantees and Public Credit 5
3. Development of the Japanese Banking Sector in the Persistent Crisis 6
3.1 Credit Crunch and Increasing Deposits 6
3.2 Interest Margins 7
3.3 Net Interest Income 9
4. Adjustment to Declining Net Interest Incomes 1
4.1 New Business Models, Increasing Fees and Commissions 1
4.2 Cost Reductions 1
4.3 Mergers 1
5. Outlook 1
References 1

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