The evaluation of Lender of Last Resort during the financial crisis: A quasi-experimental study with Japanese Historical data

2023 Fiscal Year Final Research Report

• Project/Area Number: 19K01759
• Research Category: Grant-in-Aid for Scientific Research (C)
• Allocation Type: Multi-year Fund
• Section: 一般
• Review Section: Basic Section 07060:Money and finance-related
• Research Institution: Nihon University
• Principal Investigator: SAWADA Michiru 日本大学, 経済学部, 教授 (10410672)
• Project Period (FY): 2019-04-01 – 2024-03-31
• Keywords: 銀行 / 金融危機 / 貸後の貸し手機能 / 流動性供給 / 金融仲介機能

Outline of Final Research Achievements

The Bank of Japan (BOJ) expanded its liquidity provision in response to a series of financial panics from 1931-1932; however, the BOJ restricted its lending mostly to correspondent banks. We use the BOJ’s preferential treatment of correspondent banks as a quasi-experimental setting to examine the impact of central bank lending on financial intermediation. We find that deposits and loans did not fall as fast for correspondent banks as for other banks during the panic period. Furthermore, correspondent banks were less likely to be closed. The results suggest that central banks’ liquidity provision plays a critical backstop role during financial stringency.

Free Research Field

銀行論、経済史

Academic Significance and Societal Importance of the Research Achievements

先行研究の多くが、金融危機の際に様々な政策を実施しており、最後の貸し手機能の効果以外にも様々な効果が混在する可能性があった。そこで、本研究では、中央銀行による最後の貸し手機能以外の銀行産業に対する直接的な支援策は限定的であった昭和恐慌期（1930-32年）のデータを用いることで、金融危機下においてより純粋に最後の貸し手機能の効果を捉えたと考えられる。