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Taipei,China's banking problems: lessons from the Japanese experience

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  • Montgomery, Heather

Abstract

Over the past decade, the health of the banking sector in Taipei,China has been in decline. Falling returns on assets and equity, steadily rising non-performing loans and bank runs at smaller financial institutions have highlighted problems across the banking sector as a whole. This study analyzes both the causes of, and policy responses to, the banking sector problems in Taipei,China, drawing comparisons from the experience of Japan. The author shows that there are many valuable lessons to be learned from the Japanese experience. In particular, policy makers in Taipei,China are urged to heed the early warning signs of overall banking sector problems and to avoid the policy of forbearance. Importantly, a hoped-for macroeconomic recovery cannot be relied upon to help banks “grow out” of their problems.

Suggested Citation

  • Montgomery, Heather, 2002. "Taipei,China's banking problems: lessons from the Japanese experience," MPRA Paper 14939, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:14939
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    File URL: https://mpra.ub.uni-muenchen.de/14939/1/MPRA_paper_14939.pdf
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    References listed on IDEAS

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    1. Plummer, Michael G., 1998. "Asian Development Bank, asian Development outlook 1997 and 1998 : New York: Asian Development Bank, 1997," Journal of Asian Economics, Elsevier, vol. 9(2), pages 369-371.
    2. Takeo Hoshi & Anil Kashyap, 2000. "The Japanese Banking Crisis: Where Did It Come From and How Will It End?," NBER Chapters, in: NBER Macroeconomics Annual 1999, Volume 14, pages 129-212, National Bureau of Economic Research, Inc.
    3. Mr. David Woo & Mr. Akihiro Kanaya, 2000. "The Japanese Banking Crisis of the 1990's: Sources and Lessons," IMF Working Papers 2000/007, International Monetary Fund.
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    Cited by:

    1. Montgomery, Heather & Takahashi, Yuki, 2011. "Bank recapitalization in the U.S. - lessons from Japan," MPRA Paper 33147, University Library of Munich, Germany.
    2. Barbara Stallings, 2004. "Financial Liberalization, Crisis, and Rescue: Lessons for China from Latin America and East Asia?," IDB Publications (Working Papers) 48078, Inter-American Development Bank.
    3. Montgomery, Heather, 2003. "Taiwan's looming banking crisis," Journal of Asian Economics, Elsevier, vol. 14(4), pages 645-667, August.

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    More about this item

    Keywords

    bank; crisis; Taiwan; Japan;
    All these keywords.

    JEL classification:

    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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