How can we effectively resolve the financial crisis: Empirical evidence on the bank rehabilitation plan of the Japanese government [An article from: Pacific-Basin Finance Journal]

This digital document is a journal article from Pacific-Basin Finance Journal, published by Elsevier in 2006. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
When the Japanese economy experienced a serious financial crisis in the late 1990s, the government attempted to promptly resolve this crisis by injecting public funds into bank capital, requiring these banks to compose and implement a rehabilitation plan. This paper empirically investigates whether this plan (the Business Revitalization Plan) worked effectively, emphasizing the inconsistency between strengthening the soundness of the banking industry (preventing bank failures) and expanding credit supply (improving macroeconomy). We present empirical evidence on this inconsistency and argue that the government failed to promptly resolve the serious financial crisis in Japan due to this reason.