| Budget Amount *help |
¥2,730,000 (Direct Cost: ¥2,100,000、Indirect Cost: ¥630,000)
Fiscal Year 2012: ¥650,000 (Direct Cost: ¥500,000、Indirect Cost: ¥150,000)
Fiscal Year 2011: ¥780,000 (Direct Cost: ¥600,000、Indirect Cost: ¥180,000)
Fiscal Year 2010: ¥1,300,000 (Direct Cost: ¥1,000,000、Indirect Cost: ¥300,000)
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| Research Abstract |
We analyzed theoretically and empirically the effects of Japanese government loan guarantees on banks’ non-guaranteed lending and risk-taking. Both theory and evidence further suggested that increasing loan guarantees gave banks incentives to take more risk. We also examine the effectiveness of Japan’s Emergency Credit Guarantee (ECG) program set up during the financial turmoil following the failure of Lehman Brothers. We find that the ECG program significantly improved credit availability for firms using the program. However, when it is a relationship lender (main bank) that extends an ECG loan, the increased availability is partially, if not completely, offset by a decrease in non-ECG loans by the same bank.
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