Priority Rule Violations and Perverse Banking Behaviors Theoretical Analysis and Implications of the 1990s Japanese Loan Markets /

• Main Authors: Seshimo, Hiroyuki (Author), Yamazaki, Fukuju (Author)
• Corporate Author: SpringerLink (Online service)
• Format: Electronic eBook
• Language: English
• Published: Singapore : Springer Singapore : Imprint: Springer, 2017.
• Series: SpringerBriefs in Economics,
• Subjects: Finance.; Banks and banking.; Banking.; Financial Crises.

This book theoretically and empirically explores why Japanese banks engaged in seemingly contradictory behaviors in the 1990s, namely, the credit crunch and evergreening, i.e., inefficient additional lending. A credit crunch occurs when banks are unwilling to finance good and efficient projects.  Ev...

Table of Contents:

• 1 Introduction
• 2 Examples of APR violation in Japan in the 1990s
• 3 Fundamental Structure of our Model and the Result in the Case with No APR Violations
• 4 Economic Analysis of Excess Additional Credit (Loan Evergreening)
• 5 Empirical Evidence
• 6 DIP Finance, Optimal Priority Rule, and Implications for Japanese Legal Reforms
• 7 Concluding Remarks.