Journal article 1153 views 275 downloads
Were regulatory interventions effective in lowering systemic risk during the financial crisis in Japan?
Katsutoshi Shimizu,
Kim Cuong Ly,
Kim Cuong Ly 
Journal of Multinational Financial Management, Volume: 41, Pages: 80 - 91
Swansea University Author:
Kim Cuong Ly
DOI (Published version): 10.1016/j.mulfin.2017.07.001
Abstract
This study investigates the effectiveness of various regulatory interventions on systemic risk during the financial crisis in Japan. Our evidence generally shows that the regulatory interventions worked effectively through the liquidity provision. That is, the public fund injection programs, the pro...
| Published in: | Journal of Multinational Financial Management |
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| ISSN: | 1042444X |
| Published: |
2017
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| Online Access: |
Check full text
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| URI: | https://cronfa.swan.ac.uk/Record/cronfa34600 |
| Abstract: |
This study investigates the effectiveness of various regulatory interventions on systemic risk during the financial crisis in Japan. Our evidence generally shows that the regulatory interventions worked effectively through the liquidity provision. That is, the public fund injection programs, the prompt corrective actions, and the blanket guarantee reduced systemic risk. The simple government intervention package to bail out distressed “too-big-to-fail” banks stabilized the banking system via the external channel whereas the massive bailout scheme suffered the “too-many-to-fail” problem in the sense that it increased systemic risk through both direct spillover and external channels. This study suggests that the effective government intervention should be restricted to a limited number of bailouts to reduce systemic risk. |
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| Keywords: |
financial crisis, systemic risk, deposit insurance, public fund injection, bank failure |
| College: |
Faculty of Humanities and Social Sciences |
| Start Page: |
80 |
| End Page: |
91 |