IDEAS home Printed from https://ideas.repec.org/h/pal/pmschp/978-1-137-54118-5_3.html
   My bibliography  Save this book chapter

The Lehman Shock and Its Influence on Banking Supervision Policy: 2008–13

In: Financial Crisis and Bank Management in Japan (1997 to 2016)

Author

Listed:
  • Mitsuhiko Nakano

    (Momoyama Gakuin University (St. Andrew’s University))

Abstract

Banks changed their behaviours markedly in the early 2000s to reduce their risk exposure and thereby cope with deflation. The Bank of Japan (BOJ) introduced an unconventional monetary policy to reverse the deflationary situation and to inspire economic activity, but banks did not respond to the policy. Instead, they chose to reduce their risk exposure. The reasons for the banks’ passive attitude can be inferred from the following. The first was that the banks hesitated to take risks because of the harsh experience of settling NPLs just a few years before. The second was that the banks were unable to foresee a marked improvement in the Japanese economy in the future. The third one was that they were unable to play a role as a financial intermediary because they lost an interest rate tool for selecting borrowers under the extreme monetary easing environment. When the twin catastrophes of the Lehman Shock and the Great East Japan Earthquake hit the Japanese economy successively, the economy was suddenly thrown again into a deflationary spiral.

Suggested Citation

  • Mitsuhiko Nakano, 2016. "The Lehman Shock and Its Influence on Banking Supervision Policy: 2008–13," Palgrave Macmillan Studies in Banking and Financial Institutions, in: Financial Crisis and Bank Management in Japan (1997 to 2016), chapter 3, pages 67-105, Palgrave Macmillan.
    • Handle: RePEc:pal:pmschp:978-1-137-54118-5_3
    DOI: 10.1057/978-1-137-54118-5_3
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pal:pmschp:978-1-137-54118-5_3. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.