1998 Fiscal Year Final Research Report Summary
The Management of Financial Institution and Hidden Capital Gain
| Project/Area Number |
08630095
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Public finance/Monetary economics
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| Research Institution | Senshu University |
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Principal Investigator |
KOFUJI Yasuo Senshu University Department of Commerce Professor, 商学部, 教授 (60142832)
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| Project Period (FY) |
1996 – 1998
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| Keywords | Hidden Capital Gain / Contagion Effect / Information-Based Effect / Bank / Life Insurance |
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| Research Abstract |
Japanese banks and life insurance companies had a lot of hidden capital gains. Because they had a lot of stocks and the prices of Japanese stocks increased in the post-war. But, after the stock clash of 1990 the hidden ccapital gain decreased and the management of Japanese financial institutions changed.
It is well known that a contagion effect is consist of the effects of pure panic effect and information-based effect. Recent theoretical literature developed models that distinguish these effects. The purpose of this study is to analyze the effects of the hidden capital gain on the contagion effect of financial institutions and to test empirically the information-based contagion effect hypothesis.
For this purpose, the nonperforming assets are used to measure the "pure" hidden capital gains. The pure hidden capital gains are the nominal hidden capital gain minus the nonperforming assets. I provide evidence that the contagion effect of Japanese financial institutions relies on the condition of the pure hidden capital gain.
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