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Cross-Country Studies on the Effectiveness of Market Discipline to Banks

Research Project

Project/Area Number 14530115
Research Category

Grant-in-Aid for Scientific Research (C)

Allocation TypeSingle-year Grants
Section一般
Research Field Public finance/Monetary economics
Research InstitutionGakushuin University (2003)
Nagoya City University (2002)

Principal Investigator

HOSONO Kaoru  Gakushuin Univ., Dept. of Economics, Associate Professor, 経済学部, 助教授 (80282945)

Project Period (FY) 2002 – 2003
Project Status Completed (Fiscal Year 2003)
Budget Amount *help
¥1,600,000 (Direct Cost: ¥1,600,000)
Fiscal Year 2003: ¥600,000 (Direct Cost: ¥600,000)
Fiscal Year 2002: ¥1,000,000 (Direct Cost: ¥1,000,000)
KeywordsMarket Discipline / Bank Regulation / Deposit Insurance / Bailout Policy / Representative Hypothesis / 銀行救済
Research Abstract

This study is composed of three parts.
In Part I, I conduct theoretical analyses on what conditions depositors select banks and how depositors' selection of banks affects bank managers' risk-taking behavior. I stress that bailout policy nullifies market discipline and promotes bank managers' risk taking behavior.
In Part II, I study Japanese depositors' behavior during the 1994s and find that depositors selected banks according to bank risk both in terms of deposit growth rates and deposit interest rates. The correlation of the growth rates of time deposits and bank risk increased just before the coverage limit was reintroduced in 2002.
In Part III, following surveys on the existing country studies, I present cross-country analyses conducted with Hiroko Iwaki and Tsuru Kotaro. We constructed 18,000 bank-year data across 63 countries and bank regulation data. Using this data set, we find that depositors' risk sensitivity increases as bank regulation and rule of law are weak and financial system is less developed. This result is consistent with the "representative hypothesis," positing that regulatory bodies supervise banks as a representative of depositors.

Report

(3 results)
  • 2003 Annual Research Report   Final Research Report Summary
  • 2002 Annual Research Report
  • Research Products

    (11 results)

All Other

All Publications (11 results)

  • [Publications] Kaoru Hosono: "Market Discipline and Forbearance Policy to Banks"Nagoya City University D.P. in Economics. 339. 1-45 (2003)

    • Description
      「研究成果報告書概要(和文)」より
    • Related Report
      2003 Final Research Report Summary
  • [Publications] Kaoru Hosono: "Depositor Discipline during the Banking Crisis in Japan"Gakushuin University GEM D.P. Series. 04-1. 1-57 (2004)

    • Description
      「研究成果報告書概要(和文)」より
    • Related Report
      2003 Final Research Report Summary
  • [Publications] 林敏彦, 松浦克己, 米澤康博編著: "日本の金融問題-検証から解決へ(細野 薫・第7章「銀行に対する市場規律と政府の救済政策-90年代の実証分析」P143 166"日本評論社. 435 (2003)

    • Description
      「研究成果報告書概要(和文)」より
    • Related Report
      2003 Final Research Report Summary
  • [Publications] Kaoru Hosono: "Market Discipline and Forbearance Policy to Banks"Nagoya City University Discussion Paper in Economics. No.339. 1-45 (2003)

    • Description
      「研究成果報告書概要(欧文)」より
    • Related Report
      2003 Final Research Report Summary
  • [Publications] Kaoru Hosono: "Depositor Discipline during the Banking Crisis in Japan"Gakushuin University GEM Discussion Paper. No.04-1. 1-57 (2004)

    • Description
      「研究成果報告書概要(欧文)」より
    • Related Report
      2003 Final Research Report Summary
  • [Publications] Kaoru Hosono: "Market Discipline and Forbearance Policy to Banks : The Case of Japan in the 1990s (in Japanese, "Ginko ni taisuru sijou kiritsu to seifu no kyusai seisaku : 90nendai nihon no jisshou bunseki")"Financial Problems in Japan : From Evidence to Resolution, (in Japanese, Nihon no kinyu mondai : Kenshou kara kaiketsu e) (Hayashi, Toshihiko, Katsumi Matsuura, and Yasuhiro Yonezawa (eds.)) (Nihonhyoronsha). 145-166 (2003)

    • Description
      「研究成果報告書概要(欧文)」より
    • Related Report
      2003 Final Research Report Summary
  • [Publications] Kaoru Hosono: "Market Discipline and Forbearance Policy to Banks"Nagoya City University Discussion Paper Series in Economics. 339. 1-28 (2003)

    • Related Report
      2003 Annual Research Report
  • [Publications] Kaoru Hosono: "Depositor Discipline during the Banking Crisis in Japan"Gakushuin University, Research Institute of Economics and Management, Discussion Paper Series. 04-1. 1-57 (2004)

    • Related Report
      2003 Annual Research Report
  • [Publications] 林敏彦, 松浦克己, 米沢康博編: "日本の金融問題-検証から解決へ-細野薫「銀行に対する市場規律と政府の救済政策」"日本評論社. 435(143-166) (2003)

    • Related Report
      2003 Annual Research Report
  • [Publications] 細野 薫: "Market Discipline and Forbearance Policy to Banks"Nagoya City University Discussion Paper Series in Economics. 339. 1-28 (2003)

    • Related Report
      2002 Annual Research Report
  • [Publications] 林 敏彦, 松浦克己, 米澤康博 編: "『日本の金融問題-検証から解決へ』(細野薫「銀行に対する市場規律と政府の救済政策-90年代日本の実証分析-」p.143-166)"日本評論社. 435 (2003)

    • Related Report
      2002 Annual Research Report

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Published: 2002-04-01   Modified: 2016-04-21  

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