Abstract
This chapter discusses the causes of the instability of the Japanese financial system in the 1990s. Bad loans have been the immediate cause of many of the problems facing the Japanese financial system in the 1990s, and real estate lending during the boom period of the late 1980s is generally considered a principal source of the bad loans. This chapter seeks to explain why the real estate lending took place, and to measure the actual impact it has had since the bubble burst. Real estate lending is, however, only one source of Japan’s banking problems, so data on bad loans at individual banks are used to estimate the importance of several other variables as contributing factors. The volatility of monetary policy that led to wide swings in asset prices, the impact of liberalization on bank behavior, and the role bank regulation has played in aggravating the situation are considered.
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Ueda, K. (2000). Causes of Japan’s Banking Problems in the 1990s. In: Hoshi, T., Patrick, H. (eds) Crisis and Change in the Japanese Financial System. Innovations in Financial Markets and Institutions, vol 12. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-4395-4_3
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DOI: https://doi.org/10.1007/978-1-4615-4395-4_3
Publisher Name: Springer, Boston, MA
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